E15-11B (Equity Items on the Balance Sheet) The following are selected transactions that may affect stockholders’ equity. 1. Paid the cash dividend declared in a prior year. 2. Recorded a retained earnings appropriation. 3. Recorded accrued interest earne

E15-11B (Equity Items on the Balance Sheet) The following are selected transactions that may affect stockholders’ equity.

1. Paid the cash dividend declared in a prior year.

2. Recorded a retained earnings appropriation.

3. Recorded accrued interest earned on a note receivable from a major shareholder.

4. Purchased treasury stock. (The company uses the cost method.)

5. Recorded salary expense accrual.

6. Declared a cash dividend on preferred stock.

7. Declared and distributed a 5% stock dividend.

8. Issued $1 par value common stock (current market price of $75 per share) in exchange for land.

Instructions

In the table below, indicate the effect each of the eight transactions has on the financial statement elements listed. Use the following code:

I = Increase D=  Decrease NE=  No effect

Stockholders’ Paid-in Retained Net

Item     Assets      Liabilities    Equity    Capital     Earnings      Income

1

2

3

4

5

6

7

8