Question

Lindsay Co. was organized to operate as an olive business. The charter authorized the following capital...

Lindsay Co. was organized to operate as an olive business. The charter authorized the following capital stock: common stock, par value $2 per share. During the first year of operations, the following transactions were completed.

Jan. 5       Sold and issued 100,000 shares of common stock for $20 per share.

Feb 16   Exchanged 1,000 shares of common stock for a truck. The value of the stock on Feb 16 was $25 per share according to the Wall Street Journal. A search of inventories at car lots in the area revealed that the average list price of similar trucks was $27,000.

June. 17            Purchased 5,000 shares treasury stock at $22 per share.

Aug. 1       Sold 1,000 shares treasury stock at $25 per share.

Aug. 30   Sold 2,500 shares treasury stock at $20 per share.

Oct. 1       Declared cash dividends of $1.00 per share.

Oct.15       Paid cash dividends.

Required:

Use horizontal analysis to record the above transactions.

Business   Accounting   
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Answer #1
Event Date Cash      + Non cash assets   = Liabilities+ Common Additional Treasury Retained earnings Cashflows
Stock capital+ paid in cap - Stock    +
Sale of stock 5-Jan 2,000,000 2000000 FA $ 2000,000
Exchange for truck 16-Feb Truck $ 27000 2000 25000 NA
Treasury stock 17-Jun -110000 110000 FA ($ 110000)
Sales of treasury stock 1-Aug 25000 3000 -22000 FA $ 25000
Sales f Treasury stock 30-Aug 50000 -3000 -55000 -2000 FA $ 50000
Declare dividend 1-Oct 99500 -99500 NA
Dividend paid 15-Oct -99500 -99500 FA ($ 99500)
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