The effects of transactions on shareholders' equity
The following are possible transactions that affect shareholders' equity:
For each transaction above, indicate the following:
a. The accounts within the shareholders' equity section that would be affected.
b. Whether these accounts would be increased or decreased.
c. The effect (increase, decrease, or no effect) of the transaction on total shareholders' equity.
Debt, contributed and earned capital, and the classification of preferred stock
The balance sheet of Lamont Bros. follows:
a. What portions of Lamont's assets were provided by debt, contributed capital, and earned capital? Reduce contributed capital by the cost of the treasury stock.
b. Compute the company's debt/equity ratio. Compute the debt/equity ratio if the preferred stock issuance was classified as a long-term debt. ...