Using the Column Headings Provided Below, Show the Effect, If

question 8

Essay

Using the column headings provided below, show the effect, if any, of the transaction on each financial statement category by indicating whether it is an addition (+)or subtraction (-)and by showing the amount in the appropriate column.For the treasury stock column, show the effects, if any, of the transaction on total stockholders' equity.Do not show items that affect net income in the retained earnings column.You should assume that the transactions occurred in the chronological sequence as indicated.
$\begin{array}{l}\text { (1.) Issued } 2,400 \text { shares of } \$ 60 \text { par value preferred stock in exchange for land and } \\\text { an existing building that had appraised values of } \$ 70,000 \text { and } \$ 100,000 \text {, } \\\text { respectively. } \\\text { (2.) Issued } 15,000 \text { shares of } \$ 10 \text { par value common stock for } \$ 24 \text { per share. } \\\text { (3.) Purchased } 2,000 \text { shares of common stock for the treasury at } \$ 25 \text { per share } \\\text { (4.) Sold } 1,200 \text { shares of the treasury stock purchased in transaction } \# 3 \text { for } \$ 30 \text { per } \\\text { share. } \\\text { (5.) Declared a cash dividend of } \$ 1.40 \text { per share on the common stock outstanding, } \\\text { to be paid early next year }\\\text { (6.) Split the common stock } 2 \text {-for-1. }\end{array}$
$$\begin{array} { | c | l | l | l | l | l | l | l | } \hline & \text { Cash } & \begin{array} { c } \text { Other } \\\text { Assets }\end{array} & \text { Liabilities } & \begin{array} { c } \text { Paid-in } \\\text { Capital }\end{array} & \begin{array} { c } \text { Retningd } \\\text { Earnings }\end{array} & \begin{array} { c } \text { Treasury } \\\text { Stock }\end{array} & \begin{array} { c } \text { Net } \\\text { Income }\end{array} \\\hline 1 . & & & & & & & \\\hline 2 . & & & & & & & \\\hline 3 . & & & & & & & \\\hline 4 . & & & & & & & \\\hline 5 . & & & & & & & \\\hline 6 . & & & & & & & \\\hline\end{array}$$

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Definitions:

Average Collection Period

The mean duration required for a company to collect payments due from its clients.

Credit Period

The length of time that credit is granted.

Marginally Competitive

Describes markets or situations where small changes in performance or price can significantly affect the competitive position of firms or products.

Account Size

Account size refers to the total value or volume of assets held in an individual's or entity's investment or trading account.