The following shareholders' equity accounts are reported by Talty Inc. on January 1, 2015:

Preferred shares ($6 cumulative, 6,000 issued) .....................$ 600,000

Common shares (500,000 issued) .....................................4,000,000

Retained earnings ........................................................ 1,958,000

Accumulated other comprehensive income .......................... 25,000

The following selected transactions, given in chronological order, occurred during the year:

1. Issued 10,000 common shares for $14 per share.

2. Issued 5,000 common shares in exchange for equipment. The fair value of the shares was $14 per share. The fair value of the equipment could not be reliably determined.

3. Issued 1,000 preferred shares for $100 per share.

4. The annual preferred share cash dividend was declared and paid during the year.

5. Determined that the company had another comprehensive loss of $5,000 from the revaluation of land.

Instructions

For each of the above transactions, indicate its impact on the items in the table that follows. Indicate if the item will increase (+) or decrease (-), and by how much, or if there will be no effect (NE). The first transaction has been done for you as an example.

Transcribed Image Text:

Shareholders' Equity Accumulated Other Income NE Preferred Commotained Comprehensive Assets Liabilities Shares Earnings NE 1. +S140,000 NE NE +$140,000