E123 1 noentryisnecessary 2 casha 300000

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Unformatted text preview: + $113,000 – $80,000) = .878 Most states restrict the dollar amount of dividends to either the balance in Retained Earnings or the balance in Retained Earnings less any treasury stock. So in this case, Lamont Brothers, either would be restricted to $113,000 or $33,000, depending upon the state. E12–3 (1 ) No entry is necessary. (2 ) Cash (+A) 300,000 Common Stock (+SE) Additional Paid­In Capital, Common Stock (+SE) Issued common stock. 50,000 250,000 (3 ) Cash (+A) Preferred Stock (+SE) Additional Paid­In Capital, Preferred Stock (+SE) Issued preferred stock. 3,750,000 2,500,000 1,250,000 (4 ) Cash (+A) Preferred Stock (+SE) Issued preferred stock. 2,500,000 2,500,000 Effect of each event on basic accounting equation: Transaction 1. 2. 3. 4. A s s e ts Liabilities NE + + + NE NE NE NE Owner’s Equity NE + + + Since par value of a share of stock has no relationship to market value, it has very little economic significance. At one time, par value was construed to be legal minimum capital to prot...
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This homework help was uploaded on 03/03/2014 for the course ACCT 5053 taught by Professor Staff during the Fall '08 term at Oklahoma State.

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