Essay About Common Stock And Principle Payments

Financial Management
Chapter 2
E2-1:
Common Stock is issued for $500,000 in cash (Financing-under statement of shareholder’s equity)
Twenty units of inventory are sold for $50 each (Operating- under assets in the balance sheet)
Employee wages are paid. (Operating-Cash paid to employees under Cash in a balance sheet)
A new warehouse facility is purchased. (Investing-under assets in property, plant and equipment on a balance sheet.
Principle payments on outstanding debt are paid. (Financing-under Liability and shareholder’s Equity on balance sheet).
Dividends are paid to the shareholders. (Financing- under Liabilities and Shareholder’s equity on a balance sheet)
A 4 year old vehicle, used as a delivery truck, is sold for $9000, its book value. (Operating-under operating income on an income statement)
A utility bill for March is paid in April. (Financing-under Liabilities and Shareholder’s equity, short term notes payable on balance sheet)
E2-3:
Equipment-Balance Sheet
Fees earned-Income Statement
Retained Earnings-Income Statement
Wage Expense-Income Statement
Patent-Balance Sheet
Cost of goods sold-Income statement
Common Stock-Balance Sheet
Dividend Payable- Balance Sheet
Accumulated Depreciation- Income Statement