Tech Process, Inc., manufactures a variety of computer peripherals, such as tape drives and printers. Listed below are five events that occurred during the current year.
1. Declared a $ 1.00 per share cash dividend.
2. Paid the cash dividend.
3. Purchased 1,000 shares of treasury stock for $20.00 per share.
4. Reissued 500 shares of the treasury stock at a price of $ 18.00 per share.
5. Declared a 15 percent stock dividend.
Instructions
a. Indicate the effects of each of these events on the financial measurements listed in the four columnar headings listed below. Use the following code letters: I for increase, D for decrease, and NE for no effect.
Event | Current Assets | Stockholders' Equity | Net Income | Net Cash Flow (from any source) |
b. For each event, explain the reasoning behind your answers. Be prepared to explain this reasoning in class.
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