QUESTION 2 Not complete Marked out of 52.00 P Flag question Identifying and Anal

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QUESTION 2 Not complete Marked out of 52.00 P Flag question Identifying and Analyzing Financial Statement Effects of Stock Transactions The stockholders' equity of Verrecchia Company at December 31, 2016, follows: Common stock, $5 par value, 500,000 shares authorized; 350,000 shares issued and outstanding Paid-in capital in excess of par value Retained earnings $1,750,000 800,000 634,000 During 2017, the following transactions occurred: Jan. 5 Issued 10,000 shares of common stock for $13 cash per share. Jan. 18 Repurchased 4,000 shares of common stock at $16 cash per share. Mar. 12 Sold one-fourth of the treasury shares acquired January 18 for $19 cash per share. July 17 Sold 500 shares of treasury stock for $14 cash per share Oct. 1 issued 5,000 shares of 8%, $25 par value preferred stock for $36 cash per share. This is the first issuance of preferred shares from the 50,000 authorized preferred shares. (a) Use the financial statement effects template to indicate the effects of each transaction Use negative signs with answers, when appropriate

Explanation / Answer

BALANCE SHEET Transaction Cash Asset + Non Cash Asset = Liabilities + Contributed Capital + Retained Earnings + Paid In Capital 3184000 1750000 634000 800000 Jan-05 3314000 1800000 634000 880000 Jan-18 3250000 1780000 634000 836000 Mar-12 3269000 1785000 634000 850000 Jul-17 3276000 1787500 634000 854500 Oct-01 3456000 1912500 634000 909500 STOCKHOLDERS' EQUITY Paid in Capital 8% preferred stock, $25 par value, 50000 shares authorized, 5000 shares issued and outstanding 125000 Common Stock, $5 par value, 500000 shares authorized; 360000 shares issued 1800000 Additional Paid-In-Capital Paid In Capital in excess of par value-preferred stock 55000 Paid In Capital in excess of par value-common stock 836000 Paid in Capital from treasury stock 18500 Total Paid-in capital 2834500 Retained Earnings 634000 Less: Treasury stock (2500 shares) at cost -12500 Total Stockholders equity 3456000

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