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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Comprehensive Udall Corporation’s post-closing trial balance at December 31, 2019, was as follows:

Chapter 15, Problem 17P, Comprehensive Udall Corporations post-closing trial balance at December 31, 2019, was as follows: At , example  1

At December 31, 2019, Udall had the following number of common and preferred shares:

Chapter 15, Problem 17P, Comprehensive Udall Corporations post-closing trial balance at December 31, 2019, was as follows: At , example  2

The dividends on preferred stock are $4 cumulative. In addition, the preferred stock has a preference in liquidation of $50 per share.

Required:

  1. 1. Prepare the shareholders’ equity section of Udall’s balance sheet at December 31, 2019.
  2. 2. Next Level Assume that Udall is using IFRS. At the end of 2019, Udall revalued its property, plant, and equipment upward by $70,000. Discuss how Udall's shareholders’ equity items would be different under IFRS, and then, based on your answer, repeat Requirement 1.

1.

To determine

Prepare the shareholders’ equity section of Corporation U’s balance sheet at December 31, 2019.

Explanation

Shareholders’ equity section: It is a part of the balance sheet. It reports the shareholders’ equity balances as on the balance sheet date.

Prepare the shareholders’ equity section of Corporation U’s balance sheet at December 31, 2019:

Corporation U
Shareholders' Equity
December 31, 2019
Shareholders’ equity:
Contributed capital 
Preferred stock, $4 cumulative, $50 par (50,000 shares authorized; 10,000 issued, and outstanding)$500,000
Common stock, $1 par (500,000 shares authorized, 150,000 shares issued; 140,000 outstanding)150,00...

2.

To determine

Explain the manner the shareholders’ equity items are reported differently under IFRS, and based on the explanation, repeat the part 1.

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