Required information [The following information applies to the questions displayed below.] The following selected transactions occurred for Corner Corporation: February 1 Purchased 480 shares of the company's own common stock at $28 cash per share; the stock is now held in treasury. July 15 Issued 140 of the shares purchased on February 1 for $38 cash per share. September 1 Issued 100 more of the shares purchased on February 1 for $23 cash per share. 2. Prepare journal entries for each of the transactions. (If no entry is required for a transaction/event, select " Journal Entry Required" in the first account field.) Required: 1. Indicate the account, amount, and direction of the effect for the above transactions. (Enter any decreases to account balances with a minus sign.) Assets February 1 Accumulated Other Comprehensive Income July 15 July 15 Liabilities Dividends Therefore, the total amount of September 1 September 1 3. What impact does the purchase of treasury stock have on dividends paid? paid on treasury stock. paid is Stockholders' Equity when treasury stock is purchased. 4. What impact does the reissuance of treasury stock for an amount higher than the purchase price have on net income? The reissuance of treasury stock for more or less than its original repurchase cost affect net income. The transaction affects only accounts.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
![Required information
[The following information applies to the questions displayed below.]
The following selected transactions occurred for Corner Corporation:
February 1 Purchased 480 shares of the company's own common stock at $28 cash per
share; the stock is now held in treasury.
July 15 Issued 140 of the shares purchased on February 1 for $38 cash per share.
September 1 Issued 100 more of the shares purchased on February 1 for $23 cash per
share.
2. Prepare journal entries for each of the transactions. (If no entry is required for a transaction/event, select "
Journal Entry Required" in the first account field.)
Required:
1. Indicate the account, amount, and direction of the effect for the above transactions. (Enter any decreases to account balances with
a minus sign.)
Assets
February 1 Accumulated Other Comprehensive Income
July 15
July 15
September 1
September 1
Liabilities
Dividends
Therefore, the total amount of
+
3. What impact does the purchase of treasury stock have on dividends paid?
paid on treasury stock.
paid is
Stockholders' Equity
when treasury stock is purchased.
4. What impact does the reissuance of treasury stock for an amount higher than the purchase price have on net
income?
The reissuance of treasury stock for more or less than its original repurchase cost
affect net income. The transaction affects only
accounts.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F663854a5-7475-435b-b19c-eb510a5a503e%2F932f8c8b-4b2d-4f15-b88a-66ed862e1665%2F0xy6fb7_processed.jpeg&w=3840&q=75)
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