Question

Tom Yuppy, a wealthy investor, paid $20,000 for 1,000 shares of $10 par common stock issued to him by Leuig Corp. A month later, Leuig Corp. issued an additional 2,000 shares of stock to Yuppy for $25 per share. Required: Show the effect of the two stock issues on Leuig's books in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected by the event, leave the cell blank. TOM YUPPY CO. Horizontal Statements Model Balance Sheet Income Statement Assets Revenue Expense Net Income Statement of Cash Flow Event Cash + Stockholders' Equity Common PIC in Stock Excess Land + 1 - Common stock 2 - Issue of additional shares +

Answer 1

Answer

Event	Cash	Land	Common Stock	PIC in Excess	Revenues	Expenses	Net Income	Statement of Cash Flows
1	$20,000		$10,000	$10,000				$20,000	FA
2	$50,000		$20,000	$30,000				$50,000	FA