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Effect of no-par common and par preferred stock on the horizontal statements model LO 8-4 Mercury...

Effect of no-par common and par preferred stock on the horizontal statements model LO 8-4 Mercury Corporation issued 8,000 shares of no-par common stock for $20 per share. Mercury also issued 1,100 shares of $65 par, 6 percent noncumulative preferred stock at $75 per share. Required: Record these events in a horizontal statements model. In the cash flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event.

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Expert Solution

Balance Sheet

Income Statement

Cash Flow

Event No

Assets

Liabilities

Stockholder's Equity

Cash

=

+

Common Stock

Preferred Stock

Additional paid In Capital - Preferred Stock

Retained earnings

Rev.

-

Exp.

=

Net Income

Common Stock issued

$         1,60,000.00

=

$                        -  

+

$     1,60,000.00

$                         -  

$                   -  

$            -  

-

$                      -  

=

$            -  

$ 1,60,000.00

FA

Preferred Stock issued

$             82,500.00

=

$                        -  

+

$                        -  

$         71,500.00

$    11,000.00

$            -  

-

$                      -  

=

$            -  

$      82,500.00

FA

Totals

$         2,42,500.00

=

$                        -  

+

$     1,60,000.00

$         71,500.00

$    11,000.00

$                       -  

$            -  

-

$                      -  

=

$            -  

ekkarill92 answered 1 year ago
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