t the date of financial statements, ordinary shares issued would exceed ordinary shares outstanding as a result of the a declaration of share bonus b payment in full of subscribed shares c purchase of treasury shares d. declaration of a share split
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- Discuss the accounting treatment, if any, that should be given to each of the following items in computing earnings per share of ordinary shares for financial statement reporting. a) Outstanding preference shares issued at a premium with a par value liquidation right. b) The exercise at a price below market value but above book value of an ordinary share option issued during the current fiscal year to officers of the corporation. c) The replacement of a machine immediately prior to the close of the current fiscal year at a cost 20% above the original cost of the replaced machine. The new machine will perform the same function as the old machine that was sold for its book value. d) The declaration of current dividends on cumulative preference shares. e) The acquisition of some of the corporation's outstanding ordinary shares during the current fiscal year. The shares were classified as treasury shares. f) A 2-for-1 share split of ordinary shares during the current fiscal year. g) A…Discuss the accounting treatment, if any, that should be given to each of the following items in computing earnings per share of ordinary shares for financial statement reporting. a. outstanding preference shares issued at a premium with a par value liquidation right. b. the exercise at a price below market value but above book value of an ordinary share option issued during the current fiscal year to officers of the corporation. c. the replacement of a machine immediately prior to the close of the current fiscal year at a cost of 20% above the original cost of the replaced machine. the new machine will perform the same function as the old machine that was sold for its book value.Discuss the accounting treatment, if any, that should be given to each of the following items in computing earnings per share of ordinary shares for financial statement reporting. d) The declaration of current dividends on cumulative preference shares. e) The acquisition of some of the corporation's outstanding ordinary shares during the current fiscal year. The shares were classified as treasury shares. f) A 2-for-1 share split of ordinary shares during the current fiscal year. g) A provision created out of retained earnings for a contingent liability from a possible lawsuit.
- Discuss the accounting treatment, if any, that should be given to each of the following items in computing earnings per share of ordinary shares for financial statement reporting. d. the declaration of current dividends on cumulative preference shares. e. the acquisition of some of the corporation's outstanding ordinary shares during the current fiscal year. the shares were classified as treasury shares. f. a 2-for-1 share split of ordinary shres during the current fiscal year. g. a provision created out of retained earnings for a contingent liability from a possible lawsuit.3. Discuss the accounting treatment, if any, that should be given to each of the following items in computing earnings per share of ordinary shares for financial statement reporting.a) Outstanding preference shares issued at a premium with a par value liquidation right. b) The exercise at a price below market value but above book value of an ordinary share option issued during the current fiscal year to officers of the corporation.c) The replacement of a machine immediately prior to the close of the current fiscal year at a cost 20% above the original cost of the replaced machine. The new machine will perform the same function as the old machine that was sold for its book value. d) The declaration of current dividends on cumulative preference shares.e) The acquisition of some of the corporation's outstanding ordinary shares during the current fiscal year. The shares were classified as treasury shares.f) A 2-for-1 share split of ordinary shares during the current fiscal year.g) A…1. The issuer of an ordinary share dividend to ordinary shareholders should transfer from retained earnings to contributed capital an amount equal to the a. fair value of the shares issued. b. par or stated value of the shares issued. c. book value of the shares issued. d. minimum legal requirements. 2. Statement 1: Treasury shares are a company’s own shares that have been reacquired and retired. Statement 2: The cost method records all transactions in treasury shares at their cost and reports the treasury shares as a deduction from ordinary shares. a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect. 3. The declaration and issuance of a share dividend a. increases ordinary shares outstanding and increases total equity. b. increases retained earnings and increases total equity. c. decreases retained earnings but does not change total equity. d. may increase share premium but does not change total…
- Match each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resoldAll of the following will affect the retained earnings account, except Adjustment due to overstatement of depreciation expense from previous reporting period and was known only this current year Issuance of treasury shares at P 29 per share when its cost is P 25 per share Quasi-reorganization thru recapitalization Declaration of 10% bonus issueThe 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
- Which statement is incorrect? * PAS 33 is required to be used by companies whose shares and potential shares are publicly traded. When an undertaking presents both consolidated and separate financial statements, the disclosures required by PAS 33 need be presented only for the consolidated information Basic EPS amounts uses the profit attributable to ordinary equity holders of the parent undertaking. Basic EPS shall be calculated by dividing the numerator by the weighted-average number of ordinary shares during the period none of the aboveAs of the date of the financial statements, the number of common shares issued will exceed the number of shares outstanding as a result of the: o. purchase of treasury stocks. b. declaration of a large stock dividend. c. declaration of a "Stock split" or fractionation of shares. d. immediate purchase and withdrawal of common shares.Treasury shares were acquired for cash at a price above par value. The treasury shares were subsequently reissued for cash at a price above its acquisition price. If the cost method of accounting for treasury share transactions is used, what is the effect on total retained earnings during (1) Acquisition of Treasury Shares, and (2) Reissuance of Treasury Shares? a) (1) No effect, (2) Increase b) (1) No effect, (2) No effect c) (1) Increase, (2) Decrease d) (1) Decrease, (2) Increase