(Learning Objective 3, 4: Measuring the effects of dividend and treasury stock transactions on a company) Dairy Freeze of Texas, Inc., completed the following transactions during 20X6, the company’s tenth year of operations:
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Mar. 18 |
Issued 10,000 shares of company stock ($5 par) for cash of $250,000. |
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Apr. 22 |
Purchased 2,000 shares of the company’s own common stock at $22 per share. |
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Aug. 6 |
Sold 700 shares of treasury common stock for $26 per share. |
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Sept. 1 |
Declared a cash dividend on the 10,000 shares of $0.60 no par preferred stock. |
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Nov. 18 |
Paid the cash dividends. |
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Feb. 2 |
Distributed a 10% stock dividend on the 30,000 shares of $1 par common stock outstanding. The market value of the common stock was $25 per share. |
Required
Analyze each transaction in terms of its effect on the accounting equation of Dairy Freeze of Texas, Inc.