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. 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. # Assets Liabilities Stockholders’Equity Paid-inCapital RetainedEarnings NetIncome 1. select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect 2. select an effect on a financial statement categoryDecreaseIncreaseNo effect DecreaseIncreaseNo effect select an effect on a financial statement categoryDecreaseNo effectIncrease DecreaseIncreaseNo effect select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect select an effect on a financial statement categoryDecreaseNo effectIncrease DecreaseIncreaseNo effect select an effect on a financial statement categoryDecreaseNo effectIncrease DecreaseIncreaseNo effect select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect 3. select an effect on a financial statement categoryIncreaseNo effectDecrease DecreaseIncreaseNo effect select an effect on a financial statement categoryNo effectDecreaseIncrease DecreaseIncreaseNo effect select an effect on a financial statement categoryDecreaseIncreaseNo effect DecreaseIncreaseNo effect select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect
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. |
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.
|
#
|
Assets |
Liabilities |
Stockholders’
Equity |
Paid-in
Capital |
Retained
Earnings |
Net
Income |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
1.
|
select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect | select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect | select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect | select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect | select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect | select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect | ||||||
|
2.
|
select an effect on a financial statement categoryDecreaseIncreaseNo effect DecreaseIncreaseNo effect | select an effect on a financial statement categoryDecreaseNo effectIncrease DecreaseIncreaseNo effect | select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect | select an effect on a financial statement categoryDecreaseNo effectIncrease DecreaseIncreaseNo effect | select an effect on a financial statement categoryDecreaseNo effectIncrease DecreaseIncreaseNo effect | select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect | ||||||
|
3.
|
select an effect on a financial statement categoryIncreaseNo effectDecrease DecreaseIncreaseNo effect | select an effect on a financial statement categoryNo effectDecreaseIncrease DecreaseIncreaseNo effect | select an effect on a financial statement categoryDecreaseIncreaseNo effect DecreaseIncreaseNo effect | select an effect on a financial statement categoryIncreaseDecreaseNo effect DecreaseIncreaseNo effect | select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect | select an effect on a financial statement categoryNo effectIncreaseDecrease DecreaseIncreaseNo effect |
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