What amount should be credited to Share Premium?
Q: What does Total debt include?
A: Answer: Generally, debt is an obligation imposed upon a corporation to manage its business. Total…
Q: What is hedge accounting?
A:
Q: how signaling content affects dividend policy definition
A: According to signalling theory any positive signal indicates positive indicators and will increase…
Q: what do stockholder-grantor and secured creditor means?
A: Introduction: In a corporation ownership is represented by the shares held. Owners of a corporation…
Q: How to compute book value per share?
A: The book value per share shows the net asset value of business.
Q: Define the term Book Value per Share?
A: Stock: It refers to a security issued in the form of a certificate. It implies the right of…
Q: Define secondary market
A: Secondary market: Secondary market is defined as a place where purchase and sale of securities is…
Q: how do compute thesocial security taxable earnings?
A: Federal income taxes (FIT) are imposed in USA. Tax is calculated by applying tax rates which…
Q: Define the term premium?
A: Premium in finance has several definitions, with the initiative being the overall cost of purchasing…
Q: Share option compensation is what accounting subject?
A: Stock-based compensation: It is a way of paying employees, executives, and directors of a company…
Q: Explain the Structuring the Payment for a Target Debt Coverage Ratio?
A: Coverage Ratios are the ratios that depict that on an average how a firm would be able to cover its…
Q: Define Trade discounts.
A: Business: It refers to a commercial activity involving buying and selling of a product or a…
Q: What is liquidity premium (LP)?
A: Answer: Interest rate theory on liquidity premium is a significant concept in bond investment. It…
Q: What is market debt ratio?
A: Debt ratio: The debt ratio is a financial ratio that quantifies the degree of a corporation’s…
Q: Define the term equal-payment-series sinking-fund factor?
A: Equal payment series sinking fund: In this method of investing mode, the goal is determine the equal…
Q: 1. Explain how to account for share investment?
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Define Share Repurchases.
A: Shares: A Share is a term which is used to define the ownership certificates of the company. A share…
Q: What is meant by purchasing power parity?
A: Purchasing power parity It is a measuring of the prices in various other countries that utilizes the…
Q: Explain the treatment of share issuance cost.
A: The monetary bookkeeping term stock issuance costs allude to the costs an organization brings about…
Q: What does the Book Value per Share measure?
A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…
Q: When is the Book Value per Share used?
A: Book Value Per Share: Book Value per share is a simple calculation of total shareholders’ equity,…
Q: What is a control premium and how does it affect consolidated financial statements?
A: Definition: Control premium: The control premium is the price in excess of the market price of…
Q: Define the term s liquidity position?
A: Definition: Liquidity: Liquidity is the capability of a company to pay the short-term liabilities…
Q: Define Debt Issue Costs.
A: Bonds: Bonds are a kind of interest bearing notes payable, usually issued by companies, universities…
Q: Define book value per share
A: The formula to compute book value per share as follows:
Q: How does a company determine the interest rate it uses in making a netpresent value (NPV) decision?
A: The net worth of the project after the deduction of the current worth of the cash outflows from the…
Q: How are the earnings per share beneficial for the stakeholders?
A: Earnings per Share (or) EPS are the earnings of the company. And the stakeholders for whom these…
Q: How does IFRS differ from U.S. GAAP with respect to using the equity method?
A: Equity method:
Q: What’s the difference between primary markets and secondary markets?
A: In a primary market, securities are created for the first time for investors to purchase. New…
Q: What is the internal rate of return? How is it used? How does it relate to the concept of compound…
A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…
Q: what is the difference between co-pay and coinsurance
A: Coinsurance and copays are different variants of cost sharing arrangement between health insurance…
Q: book value per share
A: Book value per share = (Ordinary share capital + Retained earnings)/Number of ordinary shares…
Q: What are debt issue costs and how should they be reported?
A:
Q: What does the debt ratio represent?
A: Debt to assets ratio: The debt to asset ratio shows the relationship between total asset and the…
Q: Briefly explain Purchasing Power Parity?
A: Purchasing Power Parity (PPP) is a theory of exchange rate determination. Purchasing power parity is…
Q: What is agency relationship and how it gives rise to agency cost of equity?
A: Introduction: Equity is nothing but a financial stake in a company. It includes shares owned by…
Q: Are debtors calculated at selling price or finished goods price? and why?
A: The word debtor comes from the word debt which means a company or an individual having a debt…
Q: Types of seller financing?
A: Seller Financing: A real estate or property agreement under which the mortgage process is managed by…
Q: What is premium on forward rate?
A: A forward rate is referred as an interest rate which is applicable on financial transactions which…
Q: How much is the book value per share?
A: Total stockholders' equity 7,800,000 Divided by no of share outstanding 1,200,000…
Q: Give an example of a book value share?
A:
Step by step
Solved in 2 steps
- Cary Corporation has 50,000 shares of 10 par common stock authorized. The following transactions took place during 2019, the first year of the corporations existence: Sold 5,000 shares of common stock for 18 per share. Issued 5,000 shares of common stock in exchange for a patent valued at 100,000. At the end of Carys first year, total contributed capital amounted to: a. 40,000 b. 90,000 c. 100,000 d. 190,000Juniper Company is authorized to issue 5,000,000 shares of $2 par value common stock. In conjunction with its incorporation process and the IPO, the company has the following transaction: Mar. 1, issued 4,000 shares of stock in exchange for equipment worth $250,000. Journalize the transaction.Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1, 000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50, 000 to retire bonds with a face value (and book value) of 50, 000. e. On July 2, 2019, Farrell purchased equipment for 63, 000 cash. f. On December 31, 2019, land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows. (Appendix 21.1) Spreadsheet and Statement Refer to the information for Farrell Corporation in P21-13. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support a 2019 statement of cash flows. (Hint: Combine the income statement and December 31, 2019, balance sheet items for the adjusted trial balance. Use a retained earnings balance of 291,000 in this adjusted trial balance.) 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)
- Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1,000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50,000 to retire bonds with a face value (and book value) of 50,000. e. On July 2, 2019, Farrell purchased equipment for 63,000 cash. f. On December 31, 2019. land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows.Vishnu Company is authorized to issue 500,000 shares of $2 par value common stock. In conjunction with its incorporation process and the IPO, the company has the following transaction: Apr. 10, issued 1,000 shares of stock for legal services valued at $15,000. Journalize the transaction.Silva Company is authorized to issue 5,000,000 shares of $2 par value common stock. In its IPO, the company has the following transaction: Mar. 1, issued 500,000 shares of stock at $15.75 per share for cash to investors. Journalize this transaction.
- Net Income and Comprehensive Income At the beginning of 2019, JR Companys shareholders equity was as follows: During 2019, the following events and transactions occurred: 1. JR recognized sales revenues of 108,000. It incurred cost of goods sold of 62,000 and operating expenses of 12,000, 2. JR issued 1,000 shares of its 5 par common stock for 14 per share. 3. JR invested 30,000 in available-for-sale securities. At the end of the year, the securities had a fair value of 35,000. 4. JR paid dividends of 6,000. The income tax rate on all items of income is 30%. Required: 1. Prepare a 2019 income statement for JR which includes net income and comprehensive income ignore earnings per share). 2. For 2016 prepare a separate (a) income statement (ignore earnings per share) and (b) statement of comprehensive income.Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of $160,000 for 2019. The corporation also has $30,000 in dividends from publicly traded domestic corporations in which the ownership percentage was 45 percent. Calculate the corporation's dividends received deduction for 2019. $_____________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $135,000. Calculate the corporation's dividends received deduction for 2019. $___________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $158,000. Calculate the corporation's dividends received deduction for 2019. $_____________Income Statement, Lower Portion Cunningham Company reports a retained earnings balance of 365,200 at the beginning of 2019. For the year ended December 31, 2019, the company reports pretax income from continuing operations of 150,500. The following information is also available pertaining to 2019: 1. The company declared and paid a 0.72 cash dividend per share on the 30,000 shares of common stock that were outstanding the entire year. 2. The company incurred a pretax 21,000 loss as a result of an earthquake, which is not unusual for the area. This is included in the 150,500 income from continuing operations. 3. The company sold Division P (a component of the company) in May. From January through May, Division P had incurred a pretax loss from operations of 33,000. A pretax gain of 15,000 was recognized on the sale of Division P. Required: Assuming that all the pretax items are subject to a 30% income tax rate: 1. Complete the lower portion of Cunningham's 2019 income statement beginning with Pretax Income from Continuing Operations. Include any related note to the financial statements. 2. Prepare an accompanying retained earnings statement.
- Ace Holding Co. shows the following investments in its accounting records at January 1, 2020:Ordinary shares:San Mikel Corporation (1,000 shares) P500,000Smarty Company (5,000 shares) 5,000,000Parking lot (leased to Star Company) 2,500,000Trademark 2,000,000Total investments P10,000,000Additional information:• Ace Holding Co. owns 1% of San Mikel Corporation and 30% of Smarty Company. During the year ended December 31, 2020, Ace Holding Co. received cash dividends of P350,000 from San Mikel Corporation and P750,000 from Smarty Company, whose 2020 net earnings were P4,000,000 and P10,000,000, respectively.• The Star Company lease which commenced on January 1, 2019 is for 5 years at an annual rental of P1,250,000. In addition, on January 1, 2019, Star Company paid a nonrefundable deposit of P400,000 as well as a security deposit of P250,000, to be refunded upon expiration of lease. Ace Holding Company received P1,250,000 rent from Star Company in 2020.• The trademark was licensed to…Ared Company showed the following shareholders’ equity on January 1, 2020: Share capital 1,000,000 Share premium 2,000,000 Retained earnings 4,000,000 The entity had 400,000 authorized shares of P5 par value, of which 200,000 shares were issued and outstanding. On July 1, 2020, the entity declared a property dividend of inventory payable on March 1, 2021. The inventory had a P1,200,000 carrying amount and a fair value less cost to distribute of P1,000,000 on July 1, 2020. The fair value less cost to distribute is P1,500,000 on December 31, 2020, and P900,000 on March 1, 2021. The net income for 2020 was P3,000,000. - What is the carrying amount of the inventory on December 31, 2020? - What is the amount to be recognized in profit or loss for the distribution of the non- cash dividend?Ared Company showed the following shareholders’ equity on January 1, 2020: Share capital 1,000,000 Share premium 2,000,000 Retained earnings 4,000,000 The entity had 400,000 authorized shares of P5 par value, of which 200,000 shares were issued and outstanding. On July 1, 2020, the entity declared a property dividend of inventory payable on March 1, 2021. The inventory had a P1,200,000 carrying amount and a fair value less cost to distribute of P1,000,000 on July 1, 2020. The fair value less cost to distribute is P1,500,000 on December 31, 2020, and P900,000 on March 1, 2021. The net income for 2020 was P3,000,000. - What amount should be reported as retained earnings on December 31, 2020? - What is the dividend payable on December 31, 2020?