(Effect of Treasury Stock Transactions on Financials) Joe Dumars Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Joe Dumars then entered into the following transactions.1. Purchased 5,000 treasury shares at $45 per share.2. Resold 2,000 of the treasury shares at $49 per share.3. Resold 500 of the treasury shares at $40 per share.InstructionsUse the following code to indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Joe Dumars Company uses the cost method (I = Increase; D = Decrease; NE = No effect). # Assets Liabilities Stockholders’Equity Paid-inCapital RetainedEarnings NetIncome 1 2 3
(Effect of Treasury Stock Transactions on Financials) Joe Dumars Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Joe Dumars then entered into the following transactions.1. Purchased 5,000 treasury shares at $45 per share.2. Resold 2,000 of the treasury shares at $49 per share.3. Resold 500 of the treasury shares at $40 per share.InstructionsUse the following code to indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Joe Dumars Company uses the cost method (I = Increase; D = Decrease; NE = No effect). # Assets Liabilities Stockholders’Equity Paid-inCapital RetainedEarnings NetIncome 1 2 3
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter12: Corporations: Organization, Stock Transactions, And Dividends
Section: Chapter Questions
Problem 3PA: Selected stock transactions The following selected accounts appear in the ledger of Parks...
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(Effect of
1. Purchased 5,000 treasury shares at $45 per share.
2. Resold 2,000 of the treasury shares at $49 per share.
3. Resold 500 of the treasury shares at $40 per share.
Instructions
Use the following code to indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Joe Dumars Company uses the cost method (I = Increase; D = Decrease; NE = No effect).
| # | Assets | Liabilities | Equity |
Paid-in Capital |
Earnings |
Net Income |
| 1 | ||||||
| 2 | ||||||
| 3 |
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