Joe Dumars Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Joe Dumars then entered into the following transactions. 1. Purchased 5,000 treasury shares at $45 per share. 2. Resold 2,000 of the treasury shares at $49 per share. 3. Resold 500 of the treasury shares at $40 per share. Indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Joe Dumars Company uses the cost method. # Assets Liabilities Stockholders’ Equity Paid-in Capital Retained Earnings Net Income 1. select an effect on a financial statement category IncreaseNo effectDecrease select an effect on a financial statement category IncreaseNo effectDecrease select an effect on a financial statement category DecreaseIncreaseNo effect select an effect on a financial statement category DecreaseNo effectIncrease select an effect on a financial statement category IncreaseDecreaseNo effect select an effect on a financial statement category DecreaseIncreaseNo effect 2. select an effect on a financial statement category DecreaseIncreaseNo effect select an effect on a financial statement category IncreaseDecreaseNo effect select an effect on a financial statement category No effectDecreaseIncrease select an effect on a financial statement category No effectIncreaseDecrease select an effect on a financial statement category IncreaseNo effectDecrease select an effect on a financial statement category DecreaseIncreaseNo effect 3. select an effect on a financial statement category No effectDecreaseIncrease select an effect on a financial statement category DecreaseIncreaseNo effect select an effect on a financial statement category IncreaseNo effectDecrease select an effect on a financial statement category No effectDecreaseIncrease select an effect on a financial statement category DecreaseIncreaseNo effect
Joe Dumars Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Joe Dumars then entered into the following transactions. 1. Purchased 5,000 treasury shares at $45 per share. 2. Resold 2,000 of the treasury shares at $49 per share. 3. Resold 500 of the treasury shares at $40 per share. Indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Joe Dumars Company uses the cost method. # Assets Liabilities Stockholders’ Equity Paid-in Capital Retained Earnings Net Income 1. select an effect on a financial statement category IncreaseNo effectDecrease select an effect on a financial statement category IncreaseNo effectDecrease select an effect on a financial statement category DecreaseIncreaseNo effect select an effect on a financial statement category DecreaseNo effectIncrease select an effect on a financial statement category IncreaseDecreaseNo effect select an effect on a financial statement category DecreaseIncreaseNo effect 2. select an effect on a financial statement category DecreaseIncreaseNo effect select an effect on a financial statement category IncreaseDecreaseNo effect select an effect on a financial statement category No effectDecreaseIncrease select an effect on a financial statement category No effectIncreaseDecrease select an effect on a financial statement category IncreaseNo effectDecrease select an effect on a financial statement category DecreaseIncreaseNo effect 3. select an effect on a financial statement category No effectDecreaseIncrease select an effect on a financial statement category DecreaseIncreaseNo effect select an effect on a financial statement category IncreaseNo effectDecrease select an effect on a financial statement category No effectDecreaseIncrease select an effect on a financial statement category DecreaseIncreaseNo effect
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter13: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 3PA: The following selected accounts appear in the ledger of EJ Construction Inc. at the beginning of the...
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Question
Joe Dumars Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Joe Dumars then entered into the following transactions.
1. | Purchased 5,000 treasury shares at $45 per share. | |
---|---|---|
2. | Resold 2,000 of the treasury shares at $49 per share. | |
3. | Resold 500 of the treasury shares at $40 per share. |
Indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Joe Dumars Company uses the cost method.
#
|
Assets |
Liabilities |
Stockholders’
Equity |
Paid-in
Capital |
Retained
Earnings |
Net
Income |
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
1.
|
select an effect on a financial statement category
IncreaseNo effectDecrease
|
select an effect on a financial statement category
IncreaseNo effectDecrease
|
select an effect on a financial statement category
DecreaseIncreaseNo effect
|
select an effect on a financial statement category
DecreaseNo effectIncrease
|
select an effect on a financial statement category
IncreaseDecreaseNo effect
|
select an effect on a financial statement category
DecreaseIncreaseNo effect
|
||||||
2.
|
select an effect on a financial statement category
DecreaseIncreaseNo effect
|
select an effect on a financial statement category
IncreaseDecreaseNo effect
|
select an effect on a financial statement category
No effectDecreaseIncrease
|
select an effect on a financial statement category
No effectIncreaseDecrease
|
select an effect on a financial statement category
IncreaseNo effectDecrease
|
select an effect on a financial statement category
DecreaseIncreaseNo effect
|
||||||
3.
|
select an effect on a financial statement category
No effectDecreaseIncrease
|
select an effect on a financial statement category
DecreaseIncreaseNo effect
|
select an effect on a financial statement category
IncreaseNo effectDecrease
|
select an effect on a financial statement category
No effectDecreaseIncrease
|
select an effect on a financial statement category
DecreaseIncreaseNo effect
|
select an effect on a financial statement category
DecreaseIncreaseNo effect
|
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