Feb 3 Issued 10,000 shares of common stock ($3.00 par) for cash of $297,000. Mar

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Feb 3 Issued 10,000 shares of common stock ($3.00 par) for cash of $297,000. Mar 19 Purchased 2,700 shares of the company's own common stock at $31 per share. Apr 24 Sold 1,400 shares of treasury stock for $32 per share. Aug 15 Declared a cash dividend on the 16,000 shares of $.50 no-par preferred stock. Sep 1 Paid the cash dividends. Nov 22 Declared and distributed a 20% stock dividend on the 94,000 shares of $3.00 par common stock outstanding. The market value of the common stock was $35 per share. 1. Analyze each transaction in terms of its effect on the accounting equation of Mable's of Montana, Inc. 2. What impact did each transaction have on cash flow? Feb 3 Issued 10,000 shares of common stock ($3.00 par) for cash of $297,000. Mar 19 Purchased 2,700 shares of the company's own common stock at $31 per share. Apr 24 Sold 1,400 shares of treasury stock for $32 per share. Aug 15 Declared a cash dividend on the 16,000 shares of $.50 no-par preferred stock. Sep 1 Paid the cash dividends. Nov 22 Declared and distributed a 20% stock dividend on the 94,000 shares of $3.00 par common stock outstanding. The market value of the common stock was $35 per share. 1. Analyze each transaction in terms of its effect on the accounting equation of Mable's of Montana, Inc. 2. What impact did each transaction have on cash flow? Mar 19 Purchased 2,700 shares of the company's own common stock at $31 per share. Apr 24 Sold 1,400 shares of treasury stock for $32 per share. Aug 15 Declared a cash dividend on the 16,000 shares of $.50 no-par preferred stock. Sep 1 Paid the cash dividends. Nov 22 Declared and distributed a 20% stock dividend on the 94,000 shares of $3.00 par common stock outstanding. The market value of the common stock was $35 per share. 1. Analyze each transaction in terms of its effect on the accounting equation of Mable's of Montana, Inc. 2. What impact did each transaction have on cash flow?

Explanation / Answer

Analyze each transaction in terms of its effect on the accounting equation of Mable's of Montana, Inc. & . What impact did each transaction have on cash flow?

Balance Sheet Impact on Cash Flow Cash = Dividend Payable + Common Stock + Additional Paid in Capital + Retained Earning - Treasury Stock Amount Activity Feb 3 297000 = 0 + 30000 + 267000 + 0 - 0 297000 FA Mar 19 -83700 = 0 + 0 + 0 + 0 - 83700 -83700 FA Apr 24 44800 = 0 + 0 + 1400 + 0 - 43400 44800 FA Aug 15 0 = 8000 + 0 + 0 + -8000 - 0 0 NA Sep 1 -8000 = -8000 + 0 + 0 + 0 - 0 -8000 FA Nov 22 0 = 0 + 56400 + 601600 + 658000 - 0 0 NA

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