Reference no: EM132737508

During 2020, Jones Corporation had the following transaction and events:

1. Issued par value preferred stock for cash at par value.
2. Issued par value common stock for cash at an amount greater that par value.
3. Completed a 2 for 1 stock split in which the $10 par value common stock was changed to $5 par value stock.
4. Declared a small stock dividend when the market value was higher than the par value.
5. Declared a cash dividend.
6. Made a prior period adjustment for understatement of net income.
7. Issued par value common stock for cash at par value.
8. Paid the cash dividend.
9. Issued the shares of common stock required by the stock dividend declaration in 4. above.

Instructions:

Problem 1: Indicate the effects of each of the foregoing items on the subdivisions of stockholders' equity. Present your answers in tabular form with the following columns. Use (I) for increase, (D) for decrease, and (NE) for no effect.