In each drop down of the \"impact on equity\"we can find the options : Stockhold
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Question
In each drop down of the "impact on equity"we can find the options :
Stockholders Equity increased
Stockholder's Equity decreased
No Change in total Equity
In each drop down of the "impact on equity"we can find the options :
Stockholders Equity increased
Stockholder's Equity decreased
No Change in total Equity
Facebook Alexander Corporation R × O De repente nos 30. Os m e Chegg Study Guided Sr x / Connect × X x ? ? C Secure https://new connect mheducation.com flow connect.htmPisRegztrue8 returnUr?https%3A%2F%2Fconnect.mheducation.com%2Fpaamweb%2Findex.htm %23%2? ? Ch 11 GL-P 11-2a-Optional See Instructor Help Save & Exit Submit Seved Check my work GL1101 - Based on Problem 11-2A LO C3, P2, P3 Vancouver Company reports the following components of stockholders' equity on December 31, 2016 15 points Common stock-$10 par value, 130,800 shares authorized, 50,800 shares issued and outstanding Paid-in capital in excess of Retained earnings Total stockholders' equity $588,68 eBook par value, common stock 75,080 410,080 $985,080 Ask Print Reterences In year 2017, the following transactions affected its stockholders' equity accounts. Jan 1 Purchased 5,880 shares of its own stock at $23 cash per share an 5 Directors declared a $2 per share cash dividend payable an February 28 to the Fobruary 5 stockholders of record Feb. 28 Paid the dividend declared July 6 Sold 1,900 of its treasury shares at $27 cash per share Aug. 22 Sold 3,100 of its treasury shares at $20 cash per share Sept. 5 Directors declared a $2 per share cash dividend payable on October 28 to the September 25 stockholders of record Oct. 28 Paid the dividend declared on September 5 Dec 31 Closed the $291,880 credit balance (from net income) in the Income Summary account to Retained Earnings on January Mc Prev 1of 1 Next Hill A" ^??1:53 PM 4/29/2018Explanation / Answer
Answer
Date
Dr. $
Cr. $
1-Jan
Treasury Stock (5,000 Shares * $23)
115,000
Cash
115,000
5-Jan
Retained Earnings [(50,000 - 5,000 Shares) * $2]
90,000
Dividend Payable
90,000
28-Feb
Dividend Payable
90,000
Cash
90,000
6-Jul
Cash (1,900 Shares * $27)
51,300
Treasury Stock (1,900 Shares * $23)
43,700
Additional Paid-in-Capital (1,900 Shares * $4)
7,600
22-Aug
Cash (3,100 Shares * $20)
62,000
Additional Paid-in-Capital (3,100 Shares * $3)
9,300
Treasury Stock (3,100 Shares * $23)
71,300
5-Sep
Retained Earnings [(50,000 - 5,000 +1,900 + 3,100 Shares) * $2]
100,000
Dividend Payable
100,000
28-Oct
Dividend Payable
100,000
Cash
100,000
31-Dec
Statement of P&L
291,000
Retained Earnings
291,000
Date
Impact on Equity
$
Reason
1-Jan
Decrease in Stockholder's Equity
115,000
Purchase of its own stock will result in Treasury Stock and Treasury Stock is deducted from Shareholder's Equity, So this will decrease Stockholder's Equity
5-Jan
Decrease in Stockholder's Equity
90,000
This will decrease the Stockholder's Equity as Dividend declaration will decrease Retained Earnings and create a Dividend liability. So this transaction will decrease Retained Earnings and Stockholder's Equity.
28-Feb
No Effect on Stockholder's Equity
-
As we have already declared dividend, so payment of Dividend will affect Liability and Cash, Stockholder's Equity will not gets affected by this.
6-Jul
Increase in Stockholder's Equity
51,300
As treasury stock has negative balance and gets deducted while calculating Stockholder's Equity, so decrease in Treasury Stock will Increase Stockholder's Equity. And The excess amount of $4 (27 - 23) will create Additional Paid-in-capital - Treasury Stock, Which has a positive balance and gets added in Stockholder's Equity
22-Aug
Increase in Stockholder's Equity
62,000
As treasury stock has negative balance and gets deducted while calculating Stockholder's Equity, so decrease in Treasury Stock will Increase Stockholder's Equity. And The amount of [3,100 Shares * $3 (23 - 20)] will decrease Additional Paid-in-capital - Treasury Stock, as we have sold the Treasury Stock in loss i.e. less than Purchase value
5-Sep
Decrease in Stockholder's Equity
100,000
This will decrease the Stockholder's Equity as Dividend declaration will decrease Retained Earnings and create a Dividend liability. So this transaction will decrease Retained Earnings and Stockholder's Equity.
28-Oct
No Effect on Stockholder's Equity
-
As we have already declared dividend, so payment of Dividend will affect Liability and Cash, Stockholder's Equity will not gets affected by this.
31-Dec
Increase in Stockholder's Equity
291,000
Income is transferred to Retained Earnings, so this will Increase the Retained Earnings and Stockholder's Equity
Note
Dear Student, I prepared Journal Entries also for better understanding and mentioned reason also, So if u have any Doubt plz feel free to reach me.
Date
Dr. $
Cr. $
1-Jan
Treasury Stock (5,000 Shares * $23)
115,000
Cash
115,000
5-Jan
Retained Earnings [(50,000 - 5,000 Shares) * $2]
90,000
Dividend Payable
90,000
28-Feb
Dividend Payable
90,000
Cash
90,000
6-Jul
Cash (1,900 Shares * $27)
51,300
Treasury Stock (1,900 Shares * $23)
43,700
Additional Paid-in-Capital (1,900 Shares * $4)
7,600
22-Aug
Cash (3,100 Shares * $20)
62,000
Additional Paid-in-Capital (3,100 Shares * $3)
9,300
Treasury Stock (3,100 Shares * $23)
71,300
5-Sep
Retained Earnings [(50,000 - 5,000 +1,900 + 3,100 Shares) * $2]
100,000
Dividend Payable
100,000
28-Oct
Dividend Payable
100,000
Cash
100,000
31-Dec
Statement of P&L
291,000
Retained Earnings
291,000
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