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Record stock transactions. (LO 1, 2, 3, 4). On the first day of the fiscal year, Music Productions Corporation had 210,000 shares of $2 par common stock issued(at par) and outstanding, and the retained earnings balance was $900.000. Show how each of the following transactions would affect the accounting equation: Issued 5,000 additional shares of common stock for $10ft per share Declared and distributed a 5% stock dividend when the market price was $10 per share Issued 15,000 additional shares of common stock for $12 per share Declared a cash dividend on outstanding shares of $1,30 per share Paid the dividend declared in item (4) Purchased 5,000 shares of treasury stock for $14 per share Sold 2,000 shares of treasury stock for $16 per share
Expert Answer
| 1 | Cash | 50000 | (5000*10) | |
| Common stock | 10000 | (5000*2) | ||
| Paid in capital in excess of par value | 40000 | (5000*8) | ||
| 2 | Stock divided | 107500 | (10750*10) | |
| Common stock | 21500 | (10750*2) | ||
| Paid in capital in excess of par value | 86000 | (10750*8) | ||
| (215000*5%= 10750 shares) | ||||
| 3 | Cash | 180000 | (15000*12) | |
| Common stock | 30000 | (15000*2) | ||
| Paid in capital in excess of par value | 150000 | (15000*10) | ||
| 4 | Cash Dividend | 312975 | (240750*1.3) | |
| Cash dividend payable | 312975 | |||
| 5 | Cash dividend payable | 312975 | ||
| Cash | 312975 | |||
| 6 | Treasury stock | 70000 | (5000*14) | |
| Cash | 70000 | |||
| 7 | Cash | 32000 | (2000*16) | |
| Treasury stock | 28000 | (2000*14) | ||
| Paid in capital in excess of treasury stock | 4000 | (2000*2) | ||
