Exam 15: Shareholders Equity: Capital Contributions and Distributions

When employees exercise their employee stock options, the firm debits _____ for the proceeds, debits _____ for any amounts credited to that account, credits _____ for the par value of the shares issued and credits _____ for any excess of the cash received plus the amount amortized over the par value of the shares issued.

A firm may postpone or omit

Which of the following is not true?

In U.S.GAAP, preferred stock subject to mandatory redemption is disclosed

When firms issue common stock for assets other than cash, the firm records the shares exchanged for noncash assets at the fair value of the shares given or, if the firm cannot make a reasonable estimate, at the fair value of the assets received.

Which of the following is/are true concerning an employee stock options' time value element?

Corporations often sell, or exchange for goods and services, various call options on their shares.The excess of the exercise price over the market price is the option's intrinsic value.

An understanding of the accounting for employee stock options (ESOs) requires several definitions.Which of the following is not true?

Which of the following is/are true regarding stock rights?

In some cases, particularly when the reissue of treasury stock results from the exercise of employee stock options, the amount paid by the firm to reacquire the treasury shares exceeds the subsequent reissue price.If the firm applied the constructive retirement method, it is unlikely that the reissue price would be so low as to require a debit to _____.

Which of the following is not true?

The value of a stock option results from the benefit element and the time value element.

Various laws and contracts govern the rights and obligations of a shareholder. Which of the following is/are not true?

Treasury stock or treasury shares are shares a firm has previously issued and later reacquired. Which of the following is/are not true?

Which of the following is true?

The accounting for employee stock options does not involve

A firm issues convertible bonds that pay 8% interest and receives $100,000.The firm could have issued nonconvertible bonds that pay 8% interest but would have received only $80,000 in bond proceeds.What journal entry is necessary under GAAP to record the issuance of the convertible bonds?

U.S.GAAP and IFRS on accounting for repurchases and reissuances of treasury shares follow the principle that treasury stock purchases and sales are operating transactions and therefore debits Cash (for economic gains) or credits Cash (for economic losses).

(CMA adapted, Jun 88 #19) Which one of the following items would likely increase earnings per share (EPS) of a corporation?

Which of the following is/are not true?