Exam 3: Equities

Elville Inc. was incorporated under provincial legislation with a December 31 year-end. The company has a single class of shares. As at December 31, 2019, it had 900,000 shares issued and outstanding. These shares had a book value of $18,000,000 on the balance sheet. During 2020, Elville repurchased 10% of the issued shares from one of the minority shareholders at a cost of $25 per share. The company held these in treasury and later found a buyer for half of these shares at $30. The other half were sold at $21 to another investor. Required: Record the share transactions using the single-transaction method for treasury stock, which is the preferred accounting method.

Which statement is correct?

Which statement about "common shares" is correct?

Where is accumulated other comprehensive income reported and what does it represent?

Which statement about cash dividends is correct?

IAS 1, Presentation of Financial Statements, stipulates that a complete set of financial statements includes a statement of changes in equity for the period. The statement of changes in equity provides information about the changes that took place during the period in all equity accounts. List the four equity accounts.

Which statement best describes the accounting when a company cancels its own shares at an amount lower than the average share value?

Which statement about a "treasury shares" is correct?

If 10,000 shares with par value of $15/share are issued for $20/share, how much will be presented as "contributed capital" for financial statement purposes?

In which account would "transactions with owners" be reported?

Outline the difference between cumulative and non-cumulative dividends.

Which statement is correct respecting a company's repurchase of its own shares?

Which of the following statements is correct?

Which statement about a "treasury shares" is correct?

Which statement about a "treasury shares" is correct?

If 1,000 preferred shares with a benchmark value of $50/share, a dividend rate of 10% and redeemable for $80/share, are sold for $75/share, how much dividend may the preferred equity holders expect to receive?

Assume that a company issued 10,000 shares for $30/share. What entry would be required to record the repurchase and cancellation of 1,000 shares at $28/share?

What needs to be reconciled in each of the components of the statement of changes in equity?

If a company issues 2,000 shares for $55 and then repurchases 50 shares at $50, how much is in the account "contributed surplus on retirement of shares'?

Pixel Points Inc. has a single class of shares. As at its year ended December 31, 2020, the company had 1,000,000 shares issued and outstanding. These shares have a book value of $5,000,000 on the balance sheet. During 2021, Pixel Points repurchased 5% of the issued shares from one of the minority shareholders at a cost of $7 per share. The company held these shares in treasury and later found a buyer for half of these shares at $8 per share. The other shares were sold at $6 to another investor. Required: Assume the Pixel Points fallows the guidance in ASPE pertaining to accounting for equity transactions. Record the share transactions using the single-transaction method for treasury shares, which is the preferred accounting method.