Exam 18: Shareholders Equity

During its first year of operations, Criswell Inc. completed the following transactions relating to shareholders' equity. The articles of incorporation authorize 5,000,000 shares with a par of $1 per share of common and 1,000,000 preferred shares with a par of $100 per share. Required: Record the above transactions in general journal form.

The common stock account in a company's balance sheet is measured as:

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Treasury stock

Two of the three primary account classifications within shareholders' equity are:

The costs of legal, promotional, and accounting services necessary to effect the sale of shares are referred to as share issue costs. How are these costs recorded? Compare this approach to the way debt issue costs are recorded.

Cal Cookie Company (CCC) has 100 million shares of $1 par common stock authorized. The transactions below caused changes in CCC's outstanding shares. Prior to the transactions, CCC's shareholders' equity included the following: Required: Record entries for the above transactions.

A statement of comprehensive income does not include:

Restrictions on retained earnings must be disclosed in the body of the balance sheet.

On June 27, 2018, Cara Van Travel distributed to its common shareholders 400,000 outstanding common shares of its investment in Constance Noring Pillows. The book value on Van's books of Noring's $1 par common stock was $2 per share. Immediately after the distribution, the market price of Noring's stock was $2.50 per share. In its income statement for the year ended June 30, 2020, what amount should Noring report as gain on disposal of the stock (ignore taxes)?

The following information comes from the 2018 Annual Report to stockholders of Composition Inc. (in thousands): From the Statement of Changes in Shareholders' Equity: From the Statement of Cash Flows: Cash flows from financing activities: How many shares of treasury stock were removed for use during 2017, and for what purpose(s)?

Mandatorily redeemable preferred stock (mandatorily redeemable preference shares) is reported among liabilities with related dividends reported in the income statement as interest expense using:

Which of the following terms or phrases is more associated with financial statements prepared in accordance with U.S. GAAP than those prepared in accordance with International Financial Reporting Standards?

Dempsey Company retires shares that it buys back. In its first share repurchase transaction, Dempsey purchased stock for more than the price at which the stock was originally issued. What is the effect of the purchase of the stock on each of the following?

Under GAAP, the declaration of a property dividend may require the recognition of a gain or loss if the fair value of the property is different from its book value on the declaration date.

ABC declared a property dividend. The dividend consisted of 10,000 common shares of its investment in XYZ Company. The shares had originally been purchased at $4 per share and had a $1 par. The value of the shares on the declaration date is $7 per share. What is the first entry that should be recorded related to this dividend?

On January 1, 2018, Gerlach Inc. had the following account balances in its shareholders' equity accounts. During 2018, Gerlach Inc. had several transactions relating to common stock. Required: Record the above transactions and events in journal entry format.

What is the effect of the declaration and subsequent issuance of a 10% stock dividend on each of the following?

On December 31, 2017, Rebel Corporation's balance sheet reported the following. Common stock, \ 1 par \ 1,000,000 Paid-in capital-excess of par 4,000,000 Retained earnings 5,280,000 Treasury stock (20,000 shares at cost) (625,000) During 2018, Rebel decided to discontinue accounting for share buybacks as treasury shares. Instead, the shares will be treated as having been retired. Required: Prepare the appropriate journal entry to effect this change.

Cash dividends become a binding liability as of the record date.

Dividends in arrears on cumulative preferred stock are liabilities to be paid at a later date.