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Using the financial statement effects template, illustrate the effects of these transactions.

Using the financial statement effects template, illustrate the effects of these transactions.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Identifying and Analyzing Financial Statement Effects of Stock Transactions (FSET) Lipe Company reports the following transactions relating to its stock accounts. Feb. 20 Issued 16,800 shares of $1 par value common stock at $25 cash per share. Feb. 21 Issued 25,200 shares of $100 par value, 8% preferred stock at $250 cash per share.. Jun. 30 Purchased 3,360 shares of its own common stock at $15 cash per share. Sep. 25 Sold 1,680 shares of the treasury stock at $21 cash per share. Using the financial statement effects template, illustrate the effects of these transactions. NOTE: Use negative signs with your answers, when appropriate. NOTE: Select "N/A" as your answer if a part of the accounting equation is not affected. Transaction Issuance of common stock. Issuance of preferred stock. Purchase of treasury stock. Sale of treasury stock. Check Cash Cash Cash Cash Cash Asset 420,000 + ✓N/A 6,300,000 ✓ # ✓N/A (50,400)✓ 35,280 + ✓ ✔ N/A Noncash Assets 0 + 0✔ + 0✔ + = ✔ N/A N/A Liabilities Balance Sheet Contributed Capital Common stock 0 x Additional paid-in capital + ✓ 6,300,000 x Preferred stock 420,000 x ✔ N/A 0x ● 0✔ + 35,280 x + Additional paid-in capital 0✔ e 0✓ ● ✔ Additional paid-in capital N/A N/A Earned Capital 0✓ + 0✓ + v Contra Equity Treasury stock Treasury stock 50,400 Income Statement Net Revenue Expenses Income + ✓ 35,280 x ●
Transcribed Image Text:Identifying and Analyzing Financial Statement Effects of Stock Transactions (FSET) Lipe Company reports the following transactions relating to its stock accounts. Feb. 20 Issued 16,800 shares of $1 par value common stock at $25 cash per share. Feb. 21 Issued 25,200 shares of $100 par value, 8% preferred stock at $250 cash per share.. Jun. 30 Purchased 3,360 shares of its own common stock at $15 cash per share. Sep. 25 Sold 1,680 shares of the treasury stock at $21 cash per share. Using the financial statement effects template, illustrate the effects of these transactions. NOTE: Use negative signs with your answers, when appropriate. NOTE: Select "N/A" as your answer if a part of the accounting equation is not affected. Transaction Issuance of common stock. Issuance of preferred stock. Purchase of treasury stock. Sale of treasury stock. Check Cash Cash Cash Cash Cash Asset 420,000 + ✓N/A 6,300,000 ✓ # ✓N/A (50,400)✓ 35,280 + ✓ ✔ N/A Noncash Assets 0 + 0✔ + 0✔ + = ✔ N/A N/A Liabilities Balance Sheet Contributed Capital Common stock 0 x Additional paid-in capital + ✓ 6,300,000 x Preferred stock 420,000 x ✔ N/A 0x ● 0✔ + 35,280 x + Additional paid-in capital 0✔ e 0✓ ● ✔ Additional paid-in capital N/A N/A Earned Capital 0✓ + 0✓ + v Contra Equity Treasury stock Treasury stock 50,400 Income Statement Net Revenue Expenses Income + ✓ 35,280 x ●
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