Question

1

Show how each of the following transactions affects the accounting equation: March 1 April 1 June 30 Issued 75,000 shares of $0.02 par value common stock for cash of $99,750 Issued 1,000 shares of $95 par value preferred stock for cash at $115 per share Purchased 1,000 shares of treasury stock for $3.00 per share i.e., the company bought its own common stock in the stock market) Show how each transaction would affect the accounting equation. Some of the account names will be abbreviated. March 1: Issued 75,000 shares of $0.02 par value common stock for cash of $99,750 (Use parentheses or a minus sign when entering component decreases or contra account increases. Use only the necessary input lines.) Assets Account Liabilities Account Shareholders' Equity Contributed Capital + Retained Earnings $ Account Account $ April 1: Issued 1,000 shares of $95 par value preferred stock for cash at $115 per share (Use parentheses or a minus sign when entering component decreases or contra account increases. Use only the necessary input lines.) = Assets Account Liabilities Account Shareholders' Equity Contributed Capital + Retained Earnings Account Account June 30: Purchased 1,000 shares of treasury stock for $3.00 per share i.e., the company bought its own common stock in the stock market) (Use parentheses or a minus sign when entering component decreases or contra account increases. Use only the necessary input lines.) Liabilities Assets Account Shareholders' Equity Contributed Capital + Retained Earnings Account Account Account

Answer 1

A D E G К L 1 2 Stockholders' equity 3 Retained earnings Contributed capital Liabilities 4 Assets + Account Account 5 Account Account 99,750 Cash 1500 Common stock 6 98,250 Paid in capital in excess of par-Common stock 7 8 Stockholders' equity Retained earnings Contributed capital Liabilities 10 Assets $ Account 11 Account Account Account 95,000 Preferred stock 20,000 Paid in capital in excess of par-Preferred stock 115,000 Cash 12 13 14 Stockholders' equity 15 Retained earnings Contributed capital Liabilities 16 Assets + Account 17 Account Account Account (3,000) Cash (3,000) Treasury stock 18 19 I

Working note:

A DE G Н JK L 2 Stockholders' equity 3 Contributed capital Liabilities + tained earni Account Assets $ SAccount 5 Account Account 75000* 0.02 Common stock 99750 Cash 6 Paid in capital in excess of par-Common stock 7 ЕВ6-Нб 8 Stockholders' equity Liabilities + tained earni Account Contributed capital 10 Assets Account $ $ Account 11 Account Preferred stock Paid in capital in excess of par-Preferred stock - 1000*115 Cash - 1000*95 =B12 - H12 12 13 14 Stockholders' equity 15 tained earni $Account Liabilities Account Contributed capital 16 Assets $ 17 Account Account Cash -1000 3 -1000*3 Treasury stock 18 19 n LO co