Question

Identifying and Analyzing Financial Statement Effects of Stock Transactions
The stockholders' equity of Verrecchia Company at December 31, 2016, follows:

Common stock, $5 par value, 500,000 shares authorized; 350,000 shares issued and outstanding	$1,750,000
Paid-in capital in excess of par value	800,000
Retained earnings	634,000

During 2017, the following transactions occurred:
Jan. 5 Issued 10,000 shares of common stock for $13 cash per share.
Jan. 18 Repurchased 4,000 shares of common stock at $16 cash per share.
Mar. 12 Sold one-fourth of the treasury shares acquired January 18 for $19 cash per share.
July 17 Sold 500 shares of treasury stock for $14 cash per share.
Oct. 1 Issued 5,000 shares of 8%, $25 par value preferred stock for $36 cash per share. This is the first issuance of preferred shares from the 50,000 authorized preferred shares.

(a) Use the financial statement effects template to indicate the effects of each transaction.

Use negative signs with answers, when appropriate.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Jan. 5	Answer		Answer		Answer		Answer		Answer
Jan. 18	Answer		Answer		Answer		Answer		Answer
Mar. 12	Answer		Answer		Answer		Answer		Answer
July. 17	Answer		Answer		Answer		Answer		Answer
Oct. 1	Answer		Answer		Answer		Answer		Answer

Income Statement
Revenue	-	Expenses	=	Net Income
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Answer 1

(a) Use the financial statement effects template to indicate the effects of each transaction.

Use negative signs with answers, when appropriate.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Jan. 5	130000						130000
Jan. 18	-64000						-64000
Mar. 12	19000						19000
July. 17	7000						7000
Oct. 1	180000						180000

Income Statement
Revenue	-	Expenses	=	Net Income
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