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

Exercise 8

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 the listed chronological sequence and that no stock had been previously issued. (Hint: Remember to consider appropriate effects of previous transactions.)a. Issued 6,000 shares of $100 par value preferred stock at par.
b. Issued 7,200 shares of $100 par value preferred stock in exchange for land that had an appraised value of $756,000.
c. Issued 68,000 shares of $5 par value common stock for $12 per share.
d. Purchased 28,000 shares of common stock for the treasury at $15 per share.
e. Sold 18,000 shares of the treasury stock purchased in transaction d for $17 per share.
f. Declared a cash dividend of $2.50 per share on the preferred stock outstanding, to be paid early next year.
g. Declared and issued a 12% stock dividend on the common stock when the market price per share of common stock was $30.