The Analytical Framework Used to Evaluate Transactions Is Reproduced Below

question 32

Essay

The analytical framework used to evaluate transactions is reproduced below:
$\begin{array}{llllll}\text { Cash }+ \text { Non-Cash } =\text { Liabilities }+ \text { Contributed }+\text { AccunulatedOther }+\text {Retained}\\\quad \quad\quad\quad\text { Assets }\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Capital } \quad\quad\quad\text { Comprehensive }\quad\quad\quad\text {Earning:}\\\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Income}\end{array}$
Using this analytical framework indicate the effect of each of the following transactions for TX Corporation:
1. TX Corporation purchased marketable securities for $150,000 for cash.
2. At the end of the period TX Corporation revalued the securities to $125,000.
3. During the next period TX Corporation sells the securities for $165,000.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock that entitles shareholders to receive dividends in arrears before common stockholders can be paid dividends.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of the corporation's profits or losses.

Dividends Per Share

Dividends per share is a measure reflecting the amount of declared dividends for each share of common stock, revealing how much a company pays out in dividends relative to its share price.

Fiscal Year

A one-year period selected for accounting purposes, which does not necessarily correspond to the calendar year.