Identifying and Analyzing Financial Statement Effects of Stock Transactions Lipe Company reports the following transactions relating to its stock accounts. Feb. 20 Issued 11,000 shares of $1 par value common stock at $30 cash per share. Feb. 21 Issued 16,000 shares of $100 par value, 8% preferred stock at $300 cash per share. Jun. 30 Purchased 3,000 shares of its own common stock at $16 cash per share. Sep. 25 Sold 1,500 shares of the treasury stock at $22 cash per share. a. Using the financial statement effects template, illustrate the effects of these transactions. Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital. Balance Sheet Transaction 2/20: Issued common stock shares 2/21: Issued preferred stock shares. 6/30: Purchased own shares. 9/25: Sold treasury stock shares. 2/20 b. Prepare the journal entries for these transactions. General Journal 2/21 6/30 9/25 Description Common stock Preferred stock Treasury stock Cash 0 0 0 → Preferred Stock ♦ + ♦ ◆ ◆ ◆ Cash Asset + 0 + 0 + 0+ 0 + 0 0 0 0 Debit Noncash Asset 0 0 0 0 0 0 0 0 0 0 0 Credit c. Post the journal entries from b to the related T-accounts. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 = Liabilities + 0+ 0 + 0 + 0 + Additional Paid in Capital 0 0 0 Treasury Stock 0 ܘ ܘ ܘ 0 Contrib. Capital + 0 + 0+ 0+ 0+ Earned Capital - 0- 0 0 0 Contra Equity 0 0 0 0 Common Stock Revenues Retained Earnings 0 0 Income Statement - Expenses = Net Income 0 - 0 0 0 DOUL 0- 0- 0- 0 oooo 0 0 0
Identifying and Analyzing Financial Statement Effects of Stock Transactions Lipe Company reports the following transactions relating to its stock accounts. Feb. 20 Issued 11,000 shares of $1 par value common stock at $30 cash per share. Feb. 21 Issued 16,000 shares of $100 par value, 8% preferred stock at $300 cash per share. Jun. 30 Purchased 3,000 shares of its own common stock at $16 cash per share. Sep. 25 Sold 1,500 shares of the treasury stock at $22 cash per share. a. Using the financial statement effects template, illustrate the effects of these transactions. Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital. Balance Sheet Transaction 2/20: Issued common stock shares 2/21: Issued preferred stock shares. 6/30: Purchased own shares. 9/25: Sold treasury stock shares. 2/20 b. Prepare the journal entries for these transactions. General Journal 2/21 6/30 9/25 Description Common stock Preferred stock Treasury stock Cash 0 0 0 → Preferred Stock ♦ + ♦ ◆ ◆ ◆ Cash Asset + 0 + 0 + 0+ 0 + 0 0 0 0 Debit Noncash Asset 0 0 0 0 0 0 0 0 0 0 0 Credit c. Post the journal entries from b to the related T-accounts. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 = Liabilities + 0+ 0 + 0 + 0 + Additional Paid in Capital 0 0 0 Treasury Stock 0 ܘ ܘ ܘ 0 Contrib. Capital + 0 + 0+ 0+ 0+ Earned Capital - 0- 0 0 0 Contra Equity 0 0 0 0 Common Stock Revenues Retained Earnings 0 0 Income Statement - Expenses = Net Income 0 - 0 0 0 DOUL 0- 0- 0- 0 oooo 0 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Identifying and Analyzing Financial Statement Effects of Stock Transactions
Lipe Company reports the following transactions relating to its stock accounts.
Feb. 20 Issued 11,000 shares of $1 par value common stock at $30 cash per share.
Feb. 21 Issued 16,000 shares of $100 par value, 8% preferred stock at $300 cash per share.
Jun. 30 Purchased 3,000 shares of its own common stock at $16 cash per share.
Sep. 25 Sold 1,500 shares of the treasury stock at $22 cash per share.
a. Using the financial statement effects template, illustrate the effects of these transactions.
Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital.
Balance Sheet
Transaction
2/20: Issued common stock shares
2/21: Issued preferred stock shares.
6/30: Purchased own shares.
9/25: Sold treasury stock shares.
2/20
b. Prepare the journal entries for these transactions.
General Journal
2/21
6/30
9/25
Description
Common stock
Preferred stock
Treasury stock
Cash
0
0
0
♦
Preferred Stock
0
♦
+
◆
♦
◆
♦
♦
Cash Asset +
0 +
0 +
0 +
0
+
0
0
0
0
Debit
0
0
0
0
0
0
0
0
0
0
Noncash
Asset
0
Credit
c. Post the journal entries from b to the related T-accounts.
0 =
0 =
0
0 =
0
0
0
0
0
0
0
0
0
0
0
Liabilities +
0 +
0 +
0 +
0 +
Additional Paid in Capital
0
0
0
Treasury Stock
0
0
0
0
0
Contrib.
Capital
+
0 +
0 +
0 +
0 +
Earned
Capital
0
0
0
0
-
Contra
Equity
0
0
0
0
Common Stock
Revenues - Expenses = Net Income
0 =
0 =
0 =
0 =
Retained Earnings
0
0
0
0
0
0
Income Statement
0
0
0
0
0
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