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For the following transaction, which would cause stockholder's equity goes up, down or stay constant.
1.Declear Dividend
2.Pay Dividend
3.Declear a stock dividend
4.Treasury resold above cost
5.Operating losses
6.Retirement above book value
7.Buy Machine for Common Stock
8.Convert bonds from common stock
9.not declear dividend on accumulated preferred stock

In my opinion, I think 4,6,7goes up, 2,5,8 goes down 1,3,9stay constant

Thank you for you guys helping

2007-02-27 12:35:31 · 1 answers · asked by Anonymous in Business & Finance Investing

1 answers

1. Net Income - dividend = Stk. hld. equity. goes up. It can also be considered as constant, but the entry is as above since it has to be recorded somewhere and at the time of recording it goes up.
2. Stay constant. Dividend is declared along with Net Income. There won't be time gap between Net Income recording and dividend declaration and payment.
3. goes up
4. goes up
5. goes down
6.you mean buy back, goes down
7. remain constant
8. goes down
9. goes up since that much of Net Income gets added on to the equity as retained earnings.

2007-02-27 21:24:01 · answer #1 · answered by Mathew C 5 · 0 0

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