In the Chart Below, Assign the Directional Effect (I =

question 23

Essay

In the chart below, assign the directional effect (I = increase, D = decrease, or NE = no effect) of each of the following six transactions on the components of the book value of common shareholders' equity.
a. Issuance of $1 par value common stock at an amount greater than par value.
b. Donation by a governmental unit to a corporation.
c. Cash dividend declared.
d. Previously declared cash dividend paid.
e. Property dividend declared and paid.
f. Large stock dividend declared and issued.
$\begin{array}{c}\begin{array}{|l|}\hline \text {Item}\\\\\hline \text {a.}\\\hline \text {b.}\\\hline \text {c.}\\\hline \text {d.}\\\hline \text {e.}\\\hline \text {f.}\\\hline \end{array}\begin{array}{l|}\hline \text {Common Stock}\\\\\hline\\\hline\\\hline\\\hline \\\hline\\\hline\\\hline\end{array}\begin{array}{l|}\hline \text {Additional Paid-In}\\\text {Capital}\\\hline \\\hline \\\hline\\\hline \\\hline \\\hline \\\hline\end{array}\begin{array}{l|}\hline \text {Deferred}\\\text {Compensation}\\\hline\\\hline \\\hline \\\hline \\\hline\\\hline\\\hline \end{array}\begin{array}{l|}\hline \text {Retained}\\\text {Earrings}\\\hline \\\hline\\\hline \\\hline\\\hline \\\hline \\\hline\end{array}\begin{array}{l|}\hline \text {Treasuiy Stock}\\ \text {at Cost}\\\hline \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline\end{array}\begin{array}{l|}\hline \text {Total Common}\\\text {Shareholders'Equity}\\\hline \\\hline \\\hline \\\hline \\ \hline\\ \hline\\\hline \end{array}\end{array}$

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Definitions:

Exercised Option

An exercised option refers to the act of utilizing the right to buy or sell the underlying asset as specified in the options contract.

Terminating Project

Refers to the process of concluding or ending a project before its natural completion, often due to failure to meet objectives, financial constraints, or external factors.

Strategic Option

This refers to choices available to a company that influence its ability to achieve corporate objectives and competitive advantage.

Bid Price

The highest price that a buyer is willing to pay for a security in the financial markets.