Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 4

Recording Stockholders' Equity Transactions
The annual report for Malibu Beachwear reported the following transactions affecting stockholders' equity:
a. Purchased $3.5 million in treasury stock.
b. Declared and paid cash dividends in the amount of $254.2 million.
c. Issued 100 percent common stock dividend involving 222.5 million additional shares with a total par value of $556.3 million.
Required:
1. Indicate the effect (increase, decrease, or no effect) of each of these transactions on total assets, liabilities, and stockholders' equity.
2. Prepare journal entries to record each of these transactions.