Brice Company completed the following transactions in Year 1, the first year of operation: Issued 36,000 shares of no-par common stock for $15 per share. Issued 9,800 shares of $25 par, 5 percent, preferred stock for $25 per share. Paid a cash dividend of $12,250 to preferred shareholders. Issued a 10 percent stock dividend on no-par common stock. The market value at the dividend declaration date was $25 per share. Later that year, issued a 2-for-1 split on the shares of outstanding common stock. The market price of the stock at that time was $70 per share. Produced $200,000 of cash revenues and incurred $95,000 of cash operating expenses. Closed the revenue, expense, and dividend accounts to retained earnings. Required a. Record each of these events in a horizontal statements model. (In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) and net change in cash (NC). Leave blank to indicate that an element is not affected by the event. Enter any decreases to account balances and cash outflows with a minus sign.) b. Record the Year 1 transactions in general journal form and post them to T-accounts. c. Prepare the stockholders' equity section of the balance sheet at the end of Year 1.
Brice Company completed the following transactions in Year 1, the first year of operation: Issued 36,000 shares of no-par common stock for $15 per share. Issued 9,800 shares of $25 par, 5 percent, preferred stock for $25 per share. Paid a cash dividend of $12,250 to preferred shareholders. Issued a 10 percent stock dividend on no-par common stock. The market value at the dividend declaration date was $25 per share. Later that year, issued a 2-for-1 split on the shares of outstanding common stock. The market price of the stock at that time was $70 per share. Produced $200,000 of cash revenues and incurred $95,000 of cash operating expenses. Closed the revenue, expense, and dividend accounts to retained earnings. Required a. Record each of these events in a horizontal statements model. (In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) and net change in cash (NC). Leave blank to indicate that an element is not affected by the event. Enter any decreases to account balances and cash outflows with a minus sign.) b. Record the Year 1 transactions in general journal form and post them to T-accounts. c. Prepare the stockholders' equity section of the balance sheet at the end of Year 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Brice Company completed the following transactions in Year 1, the first year of operation:
Issued 36,000 shares of no-par common stock for $15 per share.
Issued 9,800 shares of $25 par, 5 percent, preferred stock for $25 per share.
Paid a cash dividend of $12,250 to preferred shareholders.
Issued a 10 percent stock dividend on no-par common stock. The market value at the dividend declaration date was $25
per share.
Later that year, issued a 2-for-1 split on the shares of outstanding common stock. The market price of the stock at that
time was $70 per share.
Produced $200,000 of cash revenues and incurred $95,000 of cash operating expenses.
Closed the revenue, expense, and dividend accounts to retained earnings.
Required
a. Record each of these events in a horizontal statements model. (In the Statement of Cash Flows column, indicate
whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) and net change in cash
(NC). Leave blank to indicate that an element is not affected by the event. Enter any decreases to account balances and
cash outflows with a minus sign.)
b. Record the Year 1 transactions in general journal form and post them to T-accounts.
c. Prepare the stockholders' equity section of the balance sheet at the end of Year 1.
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