Common stock transactions and stockholders equityon march 1

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Reference no: EM13378468

Common Stock Transactions and Stockholders Equity

On March 1, 2010, Blank Company began operation with a corporate charter authorizing 50,000 shares of $4 par value common stock.

Over the company completed the following transactions:

March 1 Sold 15,000 shares of its common stock for $100,000.

Paid expenses incurred to obtain the charter and starting up and organizing the corporation $10,000.

April 10 Sold 6,500 shares of common stock for $65,000

15 Purchased 2,500 shares of Common Stock for $25,000.

May 31 The board of directors declared a $0.20 per share cash dividend to be paid on June 15 to shareholders of record on June 10.

1) Record the above transactions in T accounts.

2) Prepare the stockholders' equity section of Blank Company's balance sheet at May 31, 2010. Net Income earned during the first three months was $15,000.

3) What effect, if any will Blank Company's cash dividend declaration on May 31 have on its net income, retained earnings and cash flows?

Reference no: EM13378468

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