How to the following transactions affect the accounts listed: Cash, Other Assets

Question

How to the following transactions affect the accounts listed: Cash, Other Assets, Liabilities, Paid in Capital, Retained Earnings, Treasury Stock, Net Income.

a. Sold 5,200 shares of $10 par value preferred stock at $12.50 per share.

b. Declared the annual cash dividend of $3.20 per share on common stock. There were 18,400 shares of common stock issued and outstanding throughout the year.

c. Issued 6,400 shares of $10 par value preferred stock in exchange for a building when the market price of preferred stock was $14 per share.

d. Purchased 300 shares of preferred stock for the treasury at a price of $16 per share.

e. Sold 140 shares of the preferred stock held in treasury (see d) for $17 per share.

f. Declared and issued a 15% stock dividend on the $1 par value common stock when the market price per share was $45.

Explanation / Answer

a. Increases Cash account and Paid-in Capital account.

b. Increases Liabilities account. Decreases Retained Earnings account and Net income account.

c. Increases fixed assets(building) account and increases paid-in capital account.

d. Increases Treasury Stock account. Decreases Cash account.

e. Decreases Treasury Stock account and increases Cash account.

f. Increases Paid-in Capital account.Decreases Retained Earnings acoount and Net income account.

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