**Assessing Financial Statement Effects of Trading and Available-for-Sale Securities** This template assists in recording four financial transactions involving investments in marketable securities. Below are the details of the transactions and how they impact the financial statements: 1. **Purchased 6,000 common shares of Liu, Inc., at $11.50 cash per share.** 2. **Received a cash dividend of $1.40 per common share from Liu.** 3. **Year-end market price of Liu common stock is $11.25 per share.** 4. **Sold all 6,000 common shares of Liu for $66,300.** **Instructions:** Use negative signs for negative values when filling out the financial statement template. ### Financial Statement Template: #### Balance Sheet: - **Transaction Columns:** Each transaction is recorded in separate rows across the following columns: - **Cash Asset:** Changes in cash from transactions. - **Noncash Assets:** Changes in noncash assets. - **Liabilities:** Changes in liabilities. - **Contributed Capital:** Changes in contributed capital. - **Earned Capital:** Changes in earned capital. #### Income Statement: - **Transaction Columns:** Each transaction impacts the income statement in these areas: - **Revenue:** Income earned from transactions. - **Expenses:** Costs associated with transactions. - **Net Income:** Resulting net income from revenue minus expenses. Use this template to track the impact of each transaction on both the Balance Sheet and Income Statement, ensuring a comprehensive understanding of their financial effects.
**Assessing Financial Statement Effects of Trading and Available-for-Sale Securities** This template assists in recording four financial transactions involving investments in marketable securities. Below are the details of the transactions and how they impact the financial statements: 1. **Purchased 6,000 common shares of Liu, Inc., at $11.50 cash per share.** 2. **Received a cash dividend of $1.40 per common share from Liu.** 3. **Year-end market price of Liu common stock is $11.25 per share.** 4. **Sold all 6,000 common shares of Liu for $66,300.** **Instructions:** Use negative signs for negative values when filling out the financial statement template. ### Financial Statement Template: #### Balance Sheet: - **Transaction Columns:** Each transaction is recorded in separate rows across the following columns: - **Cash Asset:** Changes in cash from transactions. - **Noncash Assets:** Changes in noncash assets. - **Liabilities:** Changes in liabilities. - **Contributed Capital:** Changes in contributed capital. - **Earned Capital:** Changes in earned capital. #### Income Statement: - **Transaction Columns:** Each transaction impacts the income statement in these areas: - **Revenue:** Income earned from transactions. - **Expenses:** Costs associated with transactions. - **Net Income:** Resulting net income from revenue minus expenses. Use this template to track the impact of each transaction on both the Balance Sheet and Income Statement, ensuring a comprehensive understanding of their financial effects.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Assessing Financial Statement Effects of Trading and Available-for-Sale Securities**
This template assists in recording four financial transactions involving investments in marketable securities. Below are the details of the transactions and how they impact the financial statements:
1. **Purchased 6,000 common shares of Liu, Inc., at $11.50 cash per share.**
2. **Received a cash dividend of $1.40 per common share from Liu.**
3. **Year-end market price of Liu common stock is $11.25 per share.**
4. **Sold all 6,000 common shares of Liu for $66,300.**
**Instructions:** Use negative signs for negative values when filling out the financial statement template.
### Financial Statement Template:
#### Balance Sheet:
- **Transaction Columns:**
Each transaction is recorded in separate rows across the following columns:
- **Cash Asset:** Changes in cash from transactions.
- **Noncash Assets:** Changes in noncash assets.
- **Liabilities:** Changes in liabilities.
- **Contributed Capital:** Changes in contributed capital.
- **Earned Capital:** Changes in earned capital.
#### Income Statement:
- **Transaction Columns:**
Each transaction impacts the income statement in these areas:
- **Revenue:** Income earned from transactions.
- **Expenses:** Costs associated with transactions.
- **Net Income:** Resulting net income from revenue minus expenses.
Use this template to track the impact of each transaction on both the Balance Sheet and Income Statement, ensuring a comprehensive understanding of their financial effects.
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