O 0 o o CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL Capital stock is stated at par value of the share. Proceeds and/or fair value of considerations received in excess of par value, if any, is recognized as additional paid-in capital. Incremental costs directly attributable to the issuance of new shares is deducted from the proceeds, net of tax.
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- When a small, share capital dividend is declared, Retained Earnings is debited for the a. par value of the share capitalb. fair market value of the share capital on the date of recordc. fair market value of the share capital on the date of declarationd. fair market value of the share capital on the date of distributionHow should the excess of subscription price over the value of ordinary shares subscribed be recorded as additional paid-in capital when the share capital is issued as additional paid-in capital when the subscription is received as additional paid-in capital when the subscription is collected as retained earnings when the subscription is received7. If share capital is issued for tangible or intangible property, the value of share capital is equal to the following value in order of priority a) Fair market value of the priority received b) Fair market value of the capital issued c) Par value of the share capital d) All of the above priority 8. Share Premium account is recorded as a credit when- a) Shares are sold higher than par value b) Shares are sold less than the par value c) Shares are sold at par value d) All of these
- Cash dividends declared but not paid as of the statement of financial position date are reported as a. current liabilityb. deduction from Cashc. addition to Share Capitald. addition to Additional Paid-in CapitalWhat is reflected in the additional paid-in capital account?Required to answer. Single choice. a. Whichever is higher of (1) the difference between the market price and the par value when the stock was issued and (2) the difference between the market price and the par value when the stock was reacquired b. Whichever is lower of (1) the difference between the market price and the par value when the stock was issued and (2) the difference between the market price and the par value when the stock was reacquired c. The difference between the market price and the par value when the stock was reacquired d. None of the above e. The difference between the market price and the par value when the stock was issued.the total shareholders' equity after the declaration of hare capital dividend a. is greater than the total shareholders' equity before the declaration b. may be more than or less than the total shareholders' equity before the declaration depending on whether the share capital dividend declared is small or large c. is the same as the total shareholder's equity before the declaration d. a less than the total shareholders' equity before the declaration
- rdinary share capitalOrdinary share capitalWhich of the following items would not form part of the shareholders' equity of a company on the statement of financial position? Select one: a. Retained profits b. Trade payables c. Share premium d. Ordinary share capitalWhen collectability is reasonably assured, the excess of the subscription price over the statedvalue of the no-par subscribed share capital shall be recorded asa. No share capitalb. Share premium when the subscription is recordedc. Share premium when the subscription is collectedd. Share premium when the share capital is issuedThe corporation issued a 20% share dividend on its share capital. At what amount should retained earnings be reduced for this transaction? a. Zero because no effect in the total stockholders' equity b. Par Value c. Fair value at the date of issuance d. Fair value at the declaration date
- S1: The conversion of preference share capital into ordinary share capital increases the total shareholders' equity. S2: The Donated Capital account is shown as part of share premium of the reserves section of the shareholders' equity. a. Only S1 is correct b. Only S2 is correct c. Both statements are correct d. Both statements are incorrect.Boehn Corporation accounts for its investment in the common stock of Sells Company under the equity method, since they exert significant influence. Boehn Corporation should ordinarily record a cash dividend received from Sells as a. a reduction of the carrying value of the investment. b. additional paid-in capital. c. an addition to the carrying value of the investment. d. dividend income.When treasury shares are reissued as dividends, what amount shall becharged to accumulated profits? A. Cost of the treasury sharesB. Par value of the treasury sharesC. Fair value of the treasury shares on the date of declarationD. Fair value of the treasury shares on the date of issuance