Question

ll Verizon LTE 4:44 PM 55% Click Here Click Here Problem 4 Stockholders' Equity Events (18 points) Reqaired Show the effect of the following events on the company's accounting equation For cach account title affected write in the specific account name and the dollar change- Show decreases ia( Show the correct effect in the Stockholders' Equity colamm so- the Balance Sheet balances BALANCE SHEET Assets Liabilities Stockholders' Equity Event aIssued 1,000 shes. S100 par s%Prefered stock, for Land, when the stock was lling for $150share b Issued 5,000 shrs. $2 par, Common stock, for $19 Cash per share s IDeclared a S6shr, Cash Dividend on the 1,000 shrs. of Pref. Sk and $3shr On 5,000 shrs, of common stock d. Paid cash to reacquire 800 shrs, of common stock for S15/sh e Paid the cash dividend declared in event "" above fReissued the 800 shrs. acquired in event " above foe $20sh (Treasury Stock so0 Acet., tetal SE .IDeclared and Isseed 5,000 oommon shrs, for a 100% stock dividend. The market price was $22/shr

Answer 1

	Assets	=	Liabilties	+	Stockholders equity	Effects
a	150000	=		+	150000	Asset + , SE +
	(Land)	=		+	(Preferrence stock-1000*100)
		=		+	(Additional paid in capital-preference stock-1000*50)
		=		+
b	95000	=		+	95000	Asset + , SE +
	(Cash)	=		+	(Common stock-5000*2)
		=		+	(Additional paid in capital-common stock-5000*17)
		=		+
c		=	21000	+	(21000)	Liabiltiy + , SE -
		=	(dividends payable)	+	(1000*100*6%)+(5000*3)
		=		+	(Retained earnings)
		=		+
d	(12000)	=		+	(12000)	Asset - , SE -
	(800*15)	=		+	(Treasury stock)
	cash	=		+
		=		+
e	(21000)	=	(21000)	+		Asset - , Liability
	cash	=	(dividends payable)	+
		=		+
f	16000	=		+	16000	Asset + , SE +
	(800*20)	=		+	(treasury stock - 800*15=12000)
	cash	=		+	(additional paid in capital-common stock-800*5=4000)
		=		+
g		=		+	(110000)	No effect
		=		+	(5000*22)	(BECAUSE SE + ,SE -)
		=		+	Retained earnings
		=		+
		=		+	110000
		=		+	(Common stock-5000*)
		=		+	(Additional paid in capital-common stock-5000*20)

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