Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 6

Transaction analysis-various accounts Enter the following column headings across the top of a sheet of paper:

Enter the transaction letter in the first column and show the effect (if any) of each of the following transactions on each financial statement category by entering a plus (+) or minus (?) sign and the amount in the appropriate column. Do not show items that affect net income in the retained earnings column. You may also write the entries to record these transactions. You should assume that the transactions occurred in this chronological sequence and that 80,000 shares of previously issued common stock remain outstanding. (Hint: Remember to consider appropriate effects of previous transactions.)a. Sold 10,000 previously unissued shares of $1 par value common stock for $18 per share.
b. Issued 2,000 shares of previously unissued 8% cumulative preferred stock, $40 par value, in exchange for land and a building appraised at $80,000.
c. Declared and paid the annual cash dividend on the preferred stock issued in transaction b.
d. Purchased 500 shares of common stock for the treasury at a total cost of $9,500.
e. Declared a cash dividend of $0.15 per share on the common stock outstanding.
f. Sold 260 shares of the treasury stock purchased in transaction d at a price of $20 per share.
g. Declared and issued a 3% stock dividend on the common stock issued when the market value per share of common stock was $21.
h. Split the common stock 3 for 1.