Essay About Financial Accounting And Cash100,000Capital Stock100,0002

Financial Accounting, Assignment Ch2, Problem 2-3
Financial Accounting, Assignment CH2, Problem 2-3            No.DescriptionDebit ($)Credit ($)1.Cash100,000Capital stock100,0002.Bonds payable25,000Capital stock25,0003.Retained earning8,500Accumulated depreciation8,5004.Inventory15,900Cash15,9005.Inventory9,400Accounts payable9,4006.Accounts receivable7,200Inventory4,500Retained earnings2,7007.Cash3,500Accounts receivable3,5008.Retained Earnings3,000Dividends payable3,0009.Dividends payable3,000Cash3,00010There is no effect in the company capitalization, because After replacing each outstanding share with two new shares,        the value of each share reduced by half.