Chapter 10 Stockholders\' Equity Indicate effects on total stockholders\' equity

Question

Chapter 10 Stockholders' Equity Indicate effects on total stockholders' equity (LO10-7) E10-13 Indicate whether each of the following transactions increases decreases or has no effect (NE) on total assets, total liabilities, and total stockholders' equity. The first transaction is completed as an example. Total Total Total Stockholders' Transaction Assets Liabilities Equity Issue common stock NE Purchase treasury stock Sale of treasury stock Issue preferred stock Declare cash dividend Pay cash dividend 100% stock dividend 2-for-1 stock split Prepare the stockholders' equity section (LO10-7) E10-14 United Apparel has the following balances in its stockholders' equity accounts on December 31, 2015: Treasury Stock, $800,000; Common Stock, $600,000; Preferred Stock, $1,500,000; Retained Earnings, $2,200,000; and Additional Paid-in Capital, $5,400,000. Required: Prepare the stockholders' equity section of the balance sheet for United Apparel as of December 31, 2015 C The McGraw-Hill Companies, Inc., 2014 Chapter 10 10-5

Explanation / Answer

Shareholder's equity position on Dec 31, 2015:

transaction total assets total liabilities total shareholders' equity purchase treasury stock + / - NE NE sale of treasury stock + / - NE + (on profit) - (on loss) issued preferred stock + + NE declared cash dividend NE + (payable) - (retained earning reduced) pay cash dividend - - NE 100% stock dividend NE NE + / - 2 for 1 stock split NE NE NE

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