Question

Concord Corp. completed the following transactions in 2014, the first year of operation:

1.	Issued 23,000 shares of $22 par common stock for $33 per share.
2.	Issued 4,800 shares of $47 par, 5 percent, preferred stock at $49 per share.
3.	Paid the annual cash dividend to preferred shareholders.
4.	Issued a 5 percent stock dividend on the common stock. The market value at the dividend declaration date was $37 per share.
5.	Later that year, issued a 2-for-1 split on the 24,150 shares of outstanding common stock.
6.	Earned $271,500 of cash revenues and paid $139,400 of cash operating expenses.

	Record each of these events in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA) and net change in cash (NC). Use NA to indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.)

Answer 1

	Assets	=		Equity		Revenue	-	expense	=	Net income	Cash flow
			Preferred	Common	Retained
1	759000	=	0	506000	253000						FA
2	235200	=	225600		9600						FA
3	(11280)	=	0	0	(11280)						FA
4	0	=	0	42550	(42550)						NA
5	0	=	0	796950	(796950)						NA
6	132100	=	0	0	0	271500	-	139400	=	132100	OA
	1115020										NC

Note:- 2:1 splitting up shares = 24150 shares * 2/1

= 48300

  annual cash dividend to preferred shareholders =4800 * $47 * 5%

=11280