Required: Identify the type of accounting change this decision represents and prepare the journal entry to effect the reclassification of treasury shares as retired shares.
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In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2018 to discontinue accounting for reacquired shares as
| ($ in millions) | |||||
| Common stock, $1 par | $ | 300 | |||
| Paid-in capital—excess of par | 1,200 | ||||
| 1,156 | |||||
| Treasury stock (6.0 million shares at cost) | (125 | ) | |||
| Total shareholders’ equity | $ | 2,531 | |||
Required:
Identify the type of accounting change this decision represents and prepare the
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- The Crump Companies, Inc., has ownership interests in several public companies. At the beginning of 2018, thecompany’s ownership interest in the common stock of Silken Properties increased to the point that it becameappropriate to begin using the equity method of accounting for the investment. The balance in the investmentaccount was $31 million at the time of the change. Accountants working with company records determined thatthe balance would have been $48 million if the account had been adjusted to reflect the equity method.Required:1. Prepare the journal entry to record the change in accounting principle. (Ignore income taxes.)2. Briefly describe other steps Crump should take to report the change.3. Suppose Crump is changing from the equity method rather than to the equity method. How would youranswers to requirements 1 and 2 differ?Gogalor Co. was incorporated on January 1, 2020. Upon inspection of its stock and transfer book, the following transactions affecting its shares were noted January 1 No. of shares authorized 150,000 January 31 Issued shares for cash 60,000 March 15 Issued shares for land 30,000 August 10 Reacquired shares but not retired 15,000 December 30 Five-for-one share split On December 31, 2020, what is the number of shares outstanding?Da-Rocha Ltd is a listed manufacturing company which prepares its financial statements for the year ended 31 October, 2018 in accordance with IFRS. The financial statements are due to be authorized for issue on 15 January 2019. i.Da-Rocha Ltd holds an investment in the shares of a listed company, Shelga Ltd. During November 2018 there was a material fall in the value of Shelga Ltd’s shares. Analysts attribute the fall in value principally to a fraud dating back to December 2017 that was discovered by Shelga Ltd's management and announced publicly in November 2018. ii.In December 2018, the directors of Da-Rocha Ltd publicly announced a plan to reduce the workforce by 10% as a result of worsening economic conditions. Required: Discuss the effects of each of the above items on the financial statements of Da-Rocha Ltd for the year ended 31 October 2018 in accordance with IAS 10 Events after the Reporting Period
- Yompab Ltd is a listed manufacturing company which prepares its financial statements for the year ended 31 October, 2018 in accordance with IFRS. The financial statements are due to be authorized for issue on 15 January 2019.i. Yompab Ltd holds an investment in the shares of a listed company, Nanoni Ltd. During November 2018 there was a material fall in the value of Nanoni Ltd’s shares. Analysts attribute the fall in value principally to a fraud dating back to December 2017 that was discovered by Nanoni Ltd's management and announced publicly in November 2018.ii. In December 2018, the directors of Yompab Ltd publicly announced a plan to reduce the workforce by 10% as a result of worsening economic conditions.Required:Discuss the effects of each of the above items on the financial statements of Ypmpab Ltd for the year ended 31 October 2018 in accordance with IAS 10 Events after the Reporting Period.Anderson Steel Company began 2018 with 600,000 shares of common stock outstanding. On March 31, 2018,100,000 new shares were sold at a price of $45 per share. The market price has risen steadily since that time toa high of $50 per share at December 31. No other changes in shares occurred during 2018, and no securities areoutstanding that can become common stock. However, there are two agreements with officers of the company forfuture issuance of common stock. Both agreements relate to compensation arrangements reached in 2017. Thefirst agreement grants to the company president a right to 10,000 shares of stock each year the closing market priceis at least $48. The agreement begins in 2019 and expires in 2022. The second agreement grants to the controller aright to 15,000 shares of stock if she is still with the firm at the end of 2026. Net income for 2018 was $2,000,000.Required:Compute Anderson Steel Company’s basic and diluted EPS for the year ended December 31, 2018.Oakwood Inc. is a public enterprise whose shares are traded in the over-the-counter market. At December 31, 2018, Oakwood had 6,000,000 authorized shares of $10 par value common stock, of which 2,000,000 shares were issued and outstanding. The shareholders’ equity accounts at December 31, 2018, had the following balances: Transactions during 2019 and other information relating to the shareholders’ equity accounts were as follows: 1. On January 5, 2019, Oakwood issued at $54 per share, 100,000 shares of $50 par value, 9%, cumulative convertible preferred Stock. Each share of preferred stock is convertible, at the option of the holder, into 2 shares of common stock. Oakwood had 600,000 authorized shares of preferred stock. 2. On February 2, 2019, Oakwood reacquired 20,000 shares of its common stock for $16 per share. Oakwood uses the cost method to account for treasury stock. 3. On April 27, 2019, Oakwood sold 500,000 shares (previously unissued) of $10 par value common stock to the…
- During the year ended December 31, 2020, Gluco Inc. split its stock on a 5-for-1 basis. In its annual report for 2019, the firm reported net income of $941,200 for 2019, with an average 211,000 shares of common stock outstanding for that year. There was no preferred stock.Required: What amount of net income for 2019 will be reported in Gluco's 2020 annual report? Calculate Gluco's earnings per share for 2019 that would have been reported in the 2019 annual report. (Round your answer to 2 decimal places.) Calculate Gluco's earnings per share for 2019 that will be reported in the 2020 annual report for comparative purposes. (Round your answer to 2 decimal places.)During the year ended December 31, 2020, Gluco Inc. split its stock on a 3-for-1 basis. In its annual report for 2019, the firm reported net income of $987,900 for 2019, with an average 295,000 shares of common stock outstanding for that year. There was no preferred stock.Required: What amount of net income for 2019 will be reported in Gluco's 2020 annual report? Calculate Gluco's earnings per share for 2019 that would have been reported in the 2019 annual report. (Round your answer to 2 decimal places.) Calculate Gluco's earnings per share for 2019 that will be reported in the 2020 annual report for comparative purposes. Net Income ? Earnings Per Share ? Earnings Per Share ?At the beginning of 2021, Pioneer Products’ ownership interest in the common stock of LLB Co. increased to the point that it became appropriate to begin using the equity method of accounting for the investment. The balance in the investment account was $44 million at the time of the change but would have been $56 million if Pioneer had used the equity method since first investing in LLB. How should Pioneer report the change? Would your answer be the same if Pioneer is changing from the equity method rather than to the equity method?
- A. Da-Rocha Ltd is a listed manufacturing company which prepares its financial statements for the year ended 31 October, 2018 in accordance with IFRS. The financial statements are due to be authorized for issue on 15 January 2019. i.Da-Rocha Ltd holds an investment in the shares of a listed company, Shelga Ltd. During November 2018 there was a material fall in the value of Shelga Ltd’s shares. Analysts attribute the fall in value principally to a fraud dating back to December 2017 that was discovered by Shelga Ltd's management and announced publicly in November 2018. ii.In December 2018, the directors of Da-Rocha Ltd publicly announced a plan to reduce the workforce by 10% as a result of worsening economic conditions. Required: Discuss the effects of each of the above items on the financial statements of Da-Rocha Ltd for the year ended 31 October 2018 in accordance with IAS 10 Events after the Reporting Period B. Mambo Ltd has the following products in inventory at the end of 2019:…Can you fill this in? Here's what the question said: Peeler Company was incorporated as a new business on January 1, 2017. The corporate charter approved on that date authorized the issuance of 1,100 shares of $100 par, 7% cumulative, nonparticipating preferred stock and 11,000 shares of $5 par common stock. On January 10, Peeler issued for cash 530 shares of preferred stock at $117 per share and 4,200 shares of common stock at $79 per share. On January 20, it issued 1,500 shares of common stock to acquire a building site at a time when the stock was selling for $69 per share. During 2017, Peeler established an employee benefit plan and acquired 550 shares of common stock at $58 per share as treasury stock for that purpose. Later in 2017, it resold 120 shares of the stock at $67 per share. On December 31, 2017, Peeler determined its net income for the year to be $41,200. The firm declared the annual cash dividend to preferred stockholders and a cash dividend of $5 per share to the…d) Yompab Ltd is a manufacturing company that prepares its financial statements for the year ended 31st October 2018 in accordance with IFRS. The financial statements are due to be authorized for issue on 15th January 2019. Yompab Ltd holds an investment in shares of a listed company, Nanoni Ltd. During November 2018 there was a material fall in the value of Nanoni Ltd.’s shares. Analysts attribute the fall in value principally to a fraud dating back to 2017 that was discovered by management and announced publicly in November 2018. In December 2018, the directors of Yompab Ltd publicly announced a plan to reduce the workforce by 10% as a result of worsening economic conditions. Required; Discuss the effect of each of the above items on the financial statements of Yompab Ltd for the year ended 31st October 2018 in accordance with IAS 10: Events after Reporting Period. e) After a wedding in 2018, ten people died, possibly as a result of food poisoning from products sold by Lambon…
