Respuesta :
Answer and Explanation:
The impact of the transactions on the financial statement are as follows
1. In case of Sold 5,000 Shares:
The total Assets Increased by $250,000 i.e (5,000 × $25) as it increased the cash balance
Total Liabilities = No Change
Total Stockholders Equity = Increased by $250,000 as it increased the overall equity
Net Income = No Change.
2. In case of sale of 10,000 shares
The total Assets Increased by $370,000 i.e (10,000 × $37) as it increased the cash balance
Total Liabilities = No Change
Total Stockholders Equity = Increased by $370,000 as it increased the overall equity
Net Income = No Change.
3. In case of Purchased 20,000 of Treasury Stock
The Total Assets Decreased by $900,000 i.e (20,000 × $45) as it reduced the cash balance
Total Liabilities = No Change
Total Stockholders Equity Decreased by $900,000 as it decreased the overall equity
Net Income = No Change.
Note:
The number of shares given i.e 6,800, 11,800 and 21,800 are incorrect use the 5,000 shares, 10,000 shares and 20,000 shares and we did the computation accordingly
The financial statements are the mandatory records being prepared by the accounting personnel to show the effect of each business transaction in the respective accounts.
The key determinants of the financial statements are:
- Total assets
- Total liabilities
- Total stockholders' equity
- Net Income
The effect of any of the transactions will impact two accounts due to the use of the dual effect of bookkeeping.
For the given cases the impacted accounts are shown in the image attached below.
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