Effects of stock transactions on total stockholders equity


Response to the following problem:

Identify the effects of the following transactions on total stockholders' equity.

Each transaction is independent.

a. Issuance of 50,000 shares of $10 par common at $15.

b. Purchase of 1,000 shares of treasury stock (par value $0.50) at $5 per share.

c. A 10% stock dividend. Before the dividend, 500,000 shares of $1 par common stock were outstanding; market value was $7 at the time of the dividend.

d. Sale of 600 shares of $1 par treasury stock for $5 per share. Cost of the treasury stock was $2 per share.

e. A3-for-1 stock split. Prior to the split, 60,000 shares of $4 par common were outstanding.

 

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Financial Accounting: Effects of stock transactions on total stockholders equity
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