Exam 13: Equity Financing

On July 1,Riverwalk Corporation issued 2,000 shares of its $10 par common and 4,000 shares of its $10 par preferred stock for a lump sum of $80,000.At this date,Riverwalk's common stock was selling for $18 per share and the preferred stock for $13.50 per share.The amount of proceeds allocated to Riverwalk's preferred stock should be

On August 10,Bushmills Corporation reacquired 8,000 shares of its $100 par value common stock at $134.The stock was originally issued at $110.The shares were resold on November 21 at $145. Provide the entries required to record the reacquisition and the subsequent resale of the stock using the:

On February 24,Bramlett Company purchased 4,000 shares of Delaney Corp.'s newly issued 6 percent cumulative $75 par preferred stock for $304,000.Each share carried one detachable stock warrant entitling the holder to acquire at $10 one share of Delaney no-par common stock.On February 25,the market price of the preferred stock was $72 per share,and the market price of the stock warrants was $8 per warrant.On December 29,Bramlett sold all the stock warrants for $41,000.The gain on the sale of the stock warrants was

How would retained earnings be affected by the declaration of each of the following? Stock Dividend Stock Split

How would the declaration of a 20 percent stock dividend by a corporation affect each of the following on its books? Retained Total Stock- Earnings holders' Equity

Which of the following is issued to shareholders by a corporation as evidence of the ownership of rights to acquire its unissued or treasury stock?

The stockholders' equity section of Angus Corporation as of December 31,2014,contained the following accounts: Angus's board of directors declared a 10 percent stock dividend on April 1,2015,when the market value of the stock was $7 per share.Accordingly,1,000 new shares were issued.All of Angus's stock has a par value of $3 per share.Assuming Angus sustained a net loss of $12,000 for the quarter ended March 31,2015,what amount should Angus report as retained earnings as of April 1,2015?

When treasury stock is purchased for cash at more than its par value,what is the effect on total stockholders' equity under each of the following methods? Cost Method Par Value Method

On January 1,2013,Venice Company initiated a stock incentive plan for many employees.The plan provides for each qualified executive to receive options for 2,000 shares of common stock.The option is exercisable at any time after four years and prior to expiration,which is five years from the date of grant.Employment with the company is required through the exercise date.The options are not transferable and the specified exercise price is set equal to the grant date market price of the stock.Compensation cost is to be assigned equally to each year from the grant date to the first exercise (vesting)date,which is four years.The company uses SFAS No.123R to account for stock-based compensation plans. On January 1,2016,1,000 employees were each granted options to acquire 2,000 shares under the plan when the market price of the stock was $30.Management expects a forfeiture rate of approximately 4 percent per year over the service period.Application of an option pricing model results in a fair value of each option at the grant date of $12 per option. At December 31,2016,840 grantees are still employed by the company and will vest with 2,000 options each.All vested options are exercised on December 28,2017,prior to their expiration on December 31,2017.The market price of the stock on December 28,2017,was $50 per share. Required: Prepare all entries necessary to account for this stock option plan.Assume that all compensation expense is expensed in each period rather than being held back as part of inventory cost.

Which of the following presentation formats is permitted by Statement of Financial Accounting Standards No.130,"Reporting Comprehensive Income"?

The following amounts were taken from the income statement of Tarpon Springs Company for the year ending December 31,2014: Income from discontinued operations: In addition,Tarpon Springs reported the following items (all items are before taxes): The tax rate on all items is 40%. -Prepare a statement of comprehensive income in a one-statement format.

6,000 shares of common stock with a par value of $10 per share were issued initially at $12 per share.Subsequently,2,000 of these shares were acquired as treasury stock at $15 per share.Assuming that the par value method of accounting for treasury stock transactions is used,what is the effect of the acquisition of the treasury stock on each of the following? Additional Retained Paid-In Capital Earnings

Select the statement that is incorrect concerning the appropriations of retained earnings.

On June 1,2014,Revere Corporation declared a stock dividend entitling its stockholders to one additional share for each share held.At the time the dividend was declared,the market value of the stock was $10 per share and the par value was $5 per share.On this date Revere had 1,000,000 shares of common stock authorized of which 500,000 shares were outstanding.Assuming the par value of the stock was NOT changed,what entry should Revere make to record this transaction?

Chase Co.owned 30,000 common shares of Sanborn Corporation purchased in 2008 for $540,000.On September 20,2014,Chase declared a property dividend of 1 share of Sanborn for every 5 shares of Chase stock held by a stockholder.On that date,there were 50,000 common shares of Chase outstanding,and the market value of Sanborn shares was $30 per share.The entry to record the declaration of the property dividend would include a debit to Retained Earnings of

The stockholders' equity section of Pisano Corp.is presented below. Complete the following table to depict the number of shares of stock and balances in the stockholders' equity accounts after each of the following transactions.Each situation is to be considered independently of the others.

The data below are from the December 31,2014,balance sheet of the Sunshine Corporation: During 2015,the following transactions affecting corporate capital were recorded: Assuming the cost method is used for treasury stock and that retained earnings are to be reduced minimally in stock reacquisition transactions,provide the entries required to record the above transactions.

On July 1,Crimson Corporation had 200,000 shares of $10 par common stock outstanding.The market price of the stock was $12 per share.On the same date,Crimson declared a 1-for-2 reverse stock split.The par value of the stock was increased from $10 to $20,and one new $20 par share was issued for each two $10 par shares outstanding.Immediately before the 1-for-2 reverse stock split,Crimson's additional paid-in capital was $650,000.What should be the balance in Crimson's additional paid-in capital account immediately after the reverse stock split?

Adam Corporation owns 1,000 shares of common stock of Rosen,Inc. ,a large publicly traded company listed on a major stock exchange.If Rosen issues a 20 percent stock dividend when the par value is $10 per share and the market value is $70 per share,how much and what type of income should Adam report?

How would a stock split affect each of the following? Total Stockholders' Additional Assets Equity Paid-In Capital