60.1K

Verified Solution

Link Copied!

Section b) drop down choices are: Cash, Preferred Stock, Common Stock, Treasury Stock, or Additional Paid in Capital.

Analyzing and Identifying Financial Statement Effects of Stock Transactions McNichols Corp. reports the following transactions relating to its stock accounts. Jan. 15 Issued 50,000 shares of $5 par value common stock at $17 cash per share. Jan. 20 Issued 12,000 shares of $50 par value, 896 preferred stock at $78 cash per share. Mar. 31 Purchased 6,000 shares of its own common stock at $20 cash per share. June 25 Sold 4,000 shares of the treasury stock at $26 cash per share. July 15 Sold the remaining 2,000 shares of treasury stock at $19 cash per share. Required a. Using the financial statement effects template, illustrate the effects of these transactions. Use negative signs with answers when appropriate. When applicable, enter total amount for contributed capital. Balance Sheet Income Statement Noncash Contrib. Earned Contra- Transaction Cash Asset + Asset = Liabilities + Capital + Capital Equity Revenues - Expenses - Net Income 1/15 0 = $ 0 + $ 0 + $ 0 - $ 0 $ 0 $ = $ 1/20 0 + 3/31 0 = 0 - 0 - 6/25 0 = 0 + 7/15 0 + 0 = 0 + O + 0 - 0 0 - 0 = + 0 = + 0 + + + b. Prepare the journal entries for these transactions. General Journal Description Debit Credit Date 1/15 Common Stock 1/20 Preferred stock 3/31 OOOOOOOOOOOOOO 6/25 Additional paid-in capital 7/15 Cash Common Stock (SE) 1/15 c. Post the journal entries from b to the related T-accounts. Cash (A) Preferred Stock (SE) 1/15 1/15 1/20 1/20 3/31 3/31 6/25 6/25 7/15 7/ 150 1/20 3/31 6/25 7/15 0 Treasury Stock (XSE) 1/15 1/20 3/31 6/25 7/15 Additional Paid-in Capital (SE) 1/15 1/20 3/31 6/25 7/15

Answer & Explanation Solved by verified expert

See Answer