Identifying and Analyzing Financial Statement Effects of
Stock Transactions
The stockholders’ equity section of XPress Media Company for the
current year follows.
| 8% preferred stock, $25 par value, 50,000 shares
authorized; |
|
| 10,080 shares issued and outstanding |
$252,000 |
| Common stock, $10 par value, 200,000 shares authorized; |
|
| 60,000 shares issued and outstanding |
600,000 |
| Paid-in capital in excess of par value—preferred stock |
102,000 |
| Paid-in capital in excess of par value—common stock |
360,000 |
| Retained earnings |
444,000 |
During the year, the following transactions occurred.
Jan. 10 Issued 33,600 shares of common stock for $18 cash per
share.
Jan. 23 Repurchased 9,600 shares of common stock at $20 cash per
share.
Mar. 14 Sold one-half of the treasury shares acquired January 23
for $22 cash per share.
July. 15 Issued 3,120 shares of preferred stock for $153,600
cash.
Nov. 15 Sold 1,200 of the treasury shares acquired January 23 for
$26 cash per share.
Required
a. Use the financial statement effects template to
indicate the effects from each of these transactions.
Note: For each account category, indicate the
appropriate account name. Enter "N/A" for any account category that
is not used for a given transaction.
Note: Indicate a decrease in an account category
by including a negative sign with the amount.
| ($ in millions) |
Balance Sheet |
Income Statement |
| Transaction |
Cash
Asset |
+ |
Noncash Assets |
= |
Liabilities |
+ |
Contrib.
Capital |
+ |
Earned
Capital |
Revenues |
– |
Expenses |
= |
Net
Income |
| Jan. 10 |
Answer |
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Answer |
= |
Answer |
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Answer |
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Answer |
Answer |
– |
Answer |
= |
Answer |
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Answer |
Answer
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| Jan. 23 |
Answer |
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Answer |
= |
Answer |
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Answer |
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Answer |
Answer |
– |
Answer |
= |
Answer |
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Answer |
Answer
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| Mar. 14 |
Answer |
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Answer |
= |
Answer |
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Answer |
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Answer |
Answer |
– |
Answer |
= |
Answer |
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Answer |
Answer
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| July 15 |
Answer |
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Answer |
= |
Answer |
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Answer |
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Answer |
Answer |
– |
Answer |
= |
Answer |
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Answer |
Answer
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| Nov. 15 |
Answer |
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Answer |
= |
Answer |
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Answer |
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Answer |
Answer |
– |
Answer |
= |
Answer |
|
Answer |
Answer
b. Prepare the stockholders’ equity section of the balance
sheet assuming the company reports net income of $145,200 for the
current year.
Note: Do not use a negative sign with any of your
answers.
| XPRESS MEDIA COMPANY |
| Stockholders’ Equity |
| Paid‑in capital |
|
|
|
|
|
8% preferred stock, $25 par value, 50,000 shares
authorized; |
|
|
|
|
Answer |
shares issued and outstanding |
Answer |
|
|
Common stock, $10 par value, 200,000 shares authorized; |
|
|
|
|
Answer |
shares issued, (3,600 shares in treasury) |
Answer |
Answer |
| Additional paid‑in capital |
|
|
|
|
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Paid‑in capital in excess of par value—preferred stock |
|
Answer |
|
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Paid‑in capital in excess of par value—common stock |
|
Answer |
|
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Paid‑in capital from treasury stock |
|
Answer |
Answer |
| Total paid‑in capital |
|
|
|
Answer |
| Retained earnings |
|
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|
Answer |
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|
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|
Answer |
| Less: Treasury stock (3,600 common shares) |
|
|
|
Answer |
| Total stockholders’ equity |
|
|
|
Answer |