50.1K

Verified Solution

Link Copied!

Brice Co. completed the following transactions in Year 1, the first year of operation.

1. Issued 40,000 shares of no-par common stock for $15 per share.

2. Issued 10,000 shares of $25 par, 5 percent, preferred stock for $25 per share.

3. Paid a cash dividend of $12,500 to preferred shareholders.

4. Issued a 10 percent stock dividend on no-par common stock. The market value at the dividend declaration date was $20 per share.

5. Later that year, issued a 2-for-1 split on the shares of outstanding common stock. The market price of the stock at that time was $60 per share.

6. Produced $200,000 of cash revenues and incurred $92,000 of cash operating expenses.

7. Closed the revenue, expense, and dividend accounts to retained earnings.

Required a. Record each of these events in a horizontal statements model like the following one. (Enter amounts to be deducted and cash outflows with a minus sign. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells require input.) BRICE CO. Statements Model For Year 1 Balance Sheet Income Statement Assets = Liabilities + Event No. Stockholders' Equity Revenue Expenses = Net Income Statement of Cash Flows Preferred Stock + Common Stock Retained Earnings 1. = = + + + II - - 2. = + + + 11 3. + II 4. = = + + + + + + + + + 5. = = 6a - Revenues = + + II 6b - Expenses - = II + + + II Totals II + + + 11

Answer & Explanation Solved by verified expert

See Answer