Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 18, Problem 18.17E
Transact ions affecting
• LO18–6, LO18–7
Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2018. At January 1, 2018, the corporation had outstanding 105 million common shares, $1 par per share.
Required:
1. From the information provided by the account changes, you should be able to recreate the transactions that affected Brenner-Jude’s retained earnings during 2018. Prepare the
2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2018.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Chapter 11 Comprehensive Problem – CP11-11
The following note appeared on the balance sheet of Sabre Rigging Limited: As of December 31, 2019, dividends on the cumulative preferred stock were in arrears for three years to the extent of $15 per stock or $15,000 in total.
Required: 1.Does the amount of the arrears appears as a liability on the December31, 2019 balance sheet? Explain your answer.
Why might the dividends be in arrears?
The comptroller of Sabre Rigging projects net income for the2020 fiscal year of $35,000. When the company last paid dividends, the directors allocated 50 per cent of current year’s net income for dividends. If dividends on shares of preferred stock are resumed at the end of 2020 and the established policy of 50 per cent is continued, how much will be available for dividends to the common stockholders if the profit projection is realized?
N4
Refer to the Real Life Case of Chapter 19. Use financial statements (page 51) of Microsoft's 10-K for the fiscal year ended June 30 , 2019 (Source: SEC Edgar). The basic EPS of Microsoft for year 2019 is
$5.11
, weighted average shares outstanding is 7,673 million shares, and share price is
$134
. If the company had pre-announced and used all funds in its share repurchase program of
$40
billion on June 30 , 2019, what would Microsoft's basic EPS have been for fiscal year 2019? a.
$3.29
b.
$5.06
c.
$2.13
d.
$5.32
e.
$5.11
This problem is a variation of P 12–10 focusing on the fair value option.]On January 4, 2018, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Companycommon stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the abilityto exercise significant influence over Lavery’s operations. Runyan chose the fair value option to account forthis investment. Runyan received dividends of $2.00 per share on December 15, 2018, and Lavery reported netincome of $160 million for the year ended December 31, 2018. The market value of Lavery’s common stock atDecember 31, 2018, was $31 per share. On the purchase date, the book value of Lavery’s net assets was $800million and:a. The fair value of Lavery’s depreciable assets, with an average remaining useful life of six years, exceededtheir book value by $80 million.b. The remainder of the excess of the cost of the investment over the book value of net assets purchased wasattributable to…
Chapter 18 Solutions
Intermediate Accounting
Ch. 18 - Identify and briefly describe the two primary...Ch. 18 - Prob. 18.2QCh. 18 - Prob. 18.3QCh. 18 - Prob. 18.4QCh. 18 - Prob. 18.5QCh. 18 - Prob. 18.6QCh. 18 - Prob. 18.7QCh. 18 - What is meant by a shareholders preemptive right?Ch. 18 - Terminology varies in the way companies...Ch. 18 - Most preferred shares are cumulative. Explain what...
Ch. 18 - The par value of shares historically indicated the...Ch. 18 - Prob. 18.12QCh. 18 - How do we report components of comprehensive...Ch. 18 - The balance sheet reports the balances of...Ch. 18 - At times, companies issue their shares for...Ch. 18 - Prob. 18.16QCh. 18 - The costs of legal, promotional, and accounting...Ch. 18 - When a corporation acquires its own shares, those...Ch. 18 - Discuss the conceptual basis for accounting for a...Ch. 18 - The prescribed accounting treatment for stock...Ch. 18 - Brandon Components declares a 2-for-1 stock split....Ch. 18 - What is a reverse stock split? What would be the...Ch. 18 - Suppose you own 80 shares of Facebook common stock...Ch. 18 - Prob. 18.24QCh. 18 - Comprehensive income LO181 Schaeffer Corporation...Ch. 18 - Stock issued LO184 Penne Pharmaceuticals sold 8...Ch. 18 - Prob. 18.3BECh. 18 - Prob. 18.4BECh. 18 - Prob. 18.5BECh. 18 - Retirement of shares LO185 Agee Storage issued 35...Ch. 18 - Treasury stock LO185 The Jennings Group...Ch. 18 - Prob. 18.8BECh. 18 - Prob. 18.9BECh. 18 - Cash dividend LO188 Real World Financials...Ch. 18 - Effect of preferred stock on dividends LO187 The...Ch. 18 - Property dividend LO187 Adams Moving and Storage,...Ch. 18 - Stock dividend LO188 On June 13, the board of...Ch. 18 - Prob. 18.14BECh. 18 - Stock split LO188 Refer to the situation...Ch. 18 - Prob. 18.16BECh. 18 - Comprehensive income LO182 The following is from...Ch. 18 - Prob. 18.2ECh. 18 - Earnings or OCI? LO182 Indicate by letter whether...Ch. 18 - Stock issued for cash; Wright Medical Group LO184...Ch. 18 - Issuance of shares; noncash consideration LO184...Ch. 18 - Prob. 18.6ECh. 18 - Share issue costs; issuance LO184 ICOT Industries...Ch. 18 - Reporting preferred shares LO184, LO187 Ozark...Ch. 18 - Prob. 18.9ECh. 18 - Prob. 18.10ECh. 18 - Retirement of shares LO185 In 2018, Borland...Ch. 18 - Treasury stock LO185 In 2018, Western Transport...Ch. 18 - Treasury stock; weighted-average and FIFO cost ...Ch. 18 - Prob. 18.14ECh. 18 - Prob. 18.15ECh. 18 - Prob. 18.16ECh. 18 - Transact ions affecting retained earnings LO186,...Ch. 18 - Effect of cumulative, nonparticipating preferred...Ch. 18 - Stock dividend LO188 The shareholders equity of...Ch. 18 - Prob. 18.20ECh. 18 - Cash in lieu of fractional share rights LO188...Ch. 18 - Prob. 18.22ECh. 18 - Transact ions affecting retained earnings LO186...Ch. 18 - Profitability ratio LO181 Comparative balance...Ch. 18 - Prob. 18.25ECh. 18 - Various stock transactions; correction of journal...Ch. 18 - Share buybackcomparison of retirement and treasury...Ch. 18 - Reacquired sharescomparison of retired shares and...Ch. 18 - Prob. 18.4PCh. 18 - Shareholders equity transactions; statement of...Ch. 18 - Prob. 18.6PCh. 18 - Prob. 18.7PCh. 18 - Prob. 18.8PCh. 18 - Effect o f preferred stock characteristics on...Ch. 18 - Prob. 18.10PCh. 18 - Stock dividends received on investments;...Ch. 18 - Various shareholders equity topics; comprehensive ...Ch. 18 - Prob. 18.13PCh. 18 - Prob. 18.1BYPCh. 18 - Prob. 18.2BYPCh. 18 - Research Case 184 FASB codification; comprehensive...Ch. 18 - Judgment Case 185 Treasury stock; stock split;...Ch. 18 - Prob. 18.6BYPCh. 18 - Prob. 18.7BYPCh. 18 - Prob. 18.8BYPCh. 18 - Prob. 1CCTC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Problem 12-13 (Algo) B Equity method [LO12-6, 12-7] Northwest Paperboard Company, a paper and allied products manufacturer, was seeking to gain a foothold in Canada. Toward that end, the company bought 40% of the outstanding common shares of Vancouver Timber and Milling. Inc., on January 2, 2021, for $570 million. At the date of purchase, the book value of Vancouver's net assets was $860 million. The book values and fair values for all balance sheet items were the same except for inventory and plant facilities. The fair value exceeded book value by $10 million for the inventory and by $15 million for the plant facilities The estimated useful life of the plant facilities is 12 years. All inventory acquired was sold during 2021. Vancouver reported net income of $190 million for the year ended December 31, 2021. Vancouver paid a cash dividend of $30 million. Required: 1. Prepare all appropriate journal entries related to the investment during 2021. 2. What amount should Northwest report…arrow_forward4. How much is the gain (loss) on the sale of Mad Company ordinary shares on July 18, 2023? A. P4,500B. P3,000C. P1,500D. P0 5. What is the amount transferred to retained earnings if Jam Company opted to transfer the unrealized gain or loss relating to the shares sold? A. P11,100B. P5,500C. P5,100D. P1,500arrow_forwardQuestion 78 Using Financial Statements for 2018-2019. Net asset value per share of preferred stock for 2018 is $685.71. TRUE OR FALSE?arrow_forward
- Question 5 During 2021 Carla Vista Company purchased 9500 shares of Metlock Inc. for $25 per share. During the year Carla Vista Company sold 2250 shares of Metlock, Inc. for $30 per share. At December 31, 2021 the market price of Metlock, Inc.’s stock was $23 per share. What is the total amount of gain/(loss) that Carla Vista Company will report in its income statement for the year ended December 31, 2021 related to its investment in Metlock, Inc. stock? $-7750 $11250 $-19000 $-3250arrow_forwardQuestion Content Area Exercise 7-18 (LO. 2) On August 27 of the current year, Bailey Corporation exchanged $25,000 of 4% interest-bearing bonds for 100 shares of its common stock worth $300 per share. If your answer amount is zero, enter "0". a. Does this transaction qualify as a nontaxable reorganization? If so, what is its type? b. What is the gain realized by the bondholders on the exchange?$fill in the blank 2 c. What is the gain recognized by the bondholders on the exchange?$fill in the blank 3 d. What is the basis in the stock that was received?$fill in the blank 4arrow_forwardQuestion 5 An investor invested in 100 shares of Apple Inc. on Jan 12, 2018 @ $ 177.08 The company paid the following dividend: 2/15/18 0.63 5/17/18 0.73 8/16/18 0.73 11/15/18 0.73 2/14/19 0.73 5/16/19 0.77 8/15/19 0.77 11/14/19 0.77 2/13/20 0.77 5/14/20 0.82 8/13/20 0.82 11/12/20 0.205 2/11/21 0.22 5/13/21 0.22 Market price of Apple Inc. on 14 July 2021 is $ 148.88. With effect from 31 August 2020 , Apple Inc. offered 4 for 1 stock split. In Apple's case, a 4-for-1 split means that its stock would have sold at $96.19 at market close on record date rather than at $384.76. But holders of 100 shares will thereafter hold 400 shares. What is holding period return of the investor? Apply XIRR function in xls.arrow_forward
- Discussion Question 17-11 (LO. 2) Marmot Corporation pays a dividend of $100,000 in the current year. Otter Corporation, a calendar year C corporation, owns 15% of Marmot's stock. Gerald, an individual taxpayer in the 24% marginal bracket, also owns 15% of Marmot's stock. Compare and contrast the treatment of the dividend by Otter Corporation and Gerald. Use the attached dividend deduction. a. Otter Corporation will be allowed a dividends received deduction equal to 50% of the dividends it received. It will pay tax of fill in the blank % on the remaining portion of the dividends.arrow_forwardNineteen measures of solvency and profitability The comparative financial statements of Bettancort Inc. are as follows. The market price of Bettancort Inc. common stock was 71.25 on December 31, 2016. Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Retained earnings. January 1......................................... 2,655,000 2,400,000 Add net income for year............................................. 300,000 280,000 Total............................................................... 2,955,000 2,680,000 Deduct dividends: On preferred stock................................................ 15,000 15,000 On common stock................................................. 10,000 10,000 Total........................................................... 25,000 25,000 Retained earnings. December 31..................................... 2,930,000 2,655,000 Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Sales...................... 1,200,000 1,000,000 Cost of goods sold............ 500,000 475,000 Gross profit............... 700,000 525,000 Selling expenses.......... 240,000 200,000 Administrative expenses...... 180,000 150,000 Total operating expenses.. 420,000 350,000 Income from operations.. 280,000 175,000 Other income............. 166,000 225,000 446,000 400,000 Other expense (Interest)... 66,000 60,000 Income before income tax 380,000 340,000 Income tax expense....... 80,000 60,000 Net income............... 300,000 280,000 Bettancort Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 Dec.31, 2016 Dec. 31, 2015 Assets Current Assets: Cash.................................... 450,000 400,000 Marketable securities.................... 300,000 260,000 Accounts receivable (net)................. 130,000 110,000 Inventories.............................. 67,000 58,000 Prepaid expenses........................ 153,000 139,000 Total current assets..................... 1,100,000 967,000 Long-term investments.................... 2,350,000 2,200,000 Property, plant and equipment (net)....... 1,320,000 1,118,000 Total assets............................... 4,770,000 4,355,000 Liabilities Current liabilities.......................... 440,000 400,000 Long-term liabilities: Mortgage note payable, 8.8%, due 2021... 100,000 0 Bonds payable, 9%, due 2017............. 1,000,000 1,000,000 Total long term liabilities............... 1,100,000 1,000,000 Total liabilities............................ 1,540,000 1,400,000 Stockholders' equity Preferred stock 0.90, 10 par.. 200,000 200,000 Common stock. 5 par..................... 100,000 100,000 Retained earnings......................... 2,930,000 2,665,000 Total stockholders equity............... 3,230,000 2,955,000 Total liabilities and stockholders' equity..... 4,770,000 4,355,000 Instructions Determine the following measures for 2016, rounding to one decimal place: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables 6. Inventory turnover 7. Number of days' sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Number of times interest charges are earned 11. Number of times preferred dividends are earned 12. Ratio of sales to assets 13. Rate earned on total assets 14. Rate earned on stockholders' equity 15. Rate earned on common stockholders' equity 16. Earnings per share on common stock 17. Price-earnings ratio 18. Dividends per share of common stock 19. Dividend yieldarrow_forwardMeasures of liquidity, solvency and profitability The comparative financial statements of Stargel Inc. are as follows. The market price of common stock was 119.70 on December 31, 20Y2. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1............. 5,375,000 4,545,000 Net income............................. 900,000 925.000 Total................................ 6,275,000 5,470,000 Dividends: Preferred stock dividends............. 45,000 45,000 Common stock dividends............. 50,000 50,000 Total dividends.................... 95,000 95,000 Retained earnings, December 31......... 6,180,000 5,375,000 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales..................... 10,000,000 9,400,000 Cost of goods sold......... 5,350,000 4,950,000 Gross profit............... 4,650,000 4,450,000 Selling expenses.......... 2,000,000 1,880,000 Administrative expenses....... 1,500,000 1,410,000 Total operating expenses 3,500,000 3,290,000 Income from operations. 1,150.000 1,160,000 Other revenue............ 150,000 140,000 1,300,000 1,300,000 Other expense (interest).. 170,000 150,000 Income before income tax.. 1,130,000 1,150,000 Income tax expense....... 230,000 225,000 Net income............... 900,000 925,000 Stargel Inc. Comparative Balance Sheet December 31,20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash.......................................................... 500,000 400,000 Marketable securities........................................... 1,010,000 1,000,000 Accounts receivable (net)....................................... 740,000 510,000 Inventories.................................................... 1,190,000 950,000 Prepaid expenses.............................................. 250,000 229,000 Total current assets.......................................... 3,690,000 3,089,000 Long term investments............................................ 2,350,000 2,300,000 Property, plant, and equipment (net)............................... 3,740,000 3,366,000 Total assets....................................................... 9,780.000 8,755,000 Liabilities Current liabilities.................................................. 900,000 880,000 Long term liabilities: Mortgage note payable, 10%.................................... 200,000 0 Bonds payable, 10%............................................ 1,500,000 1,500,000 Total long term liabilities.................................... 1,700,000 1,500,000 Total liabilities.................................................... 2,600,000 2,380,000 Stockholders' Equity Preferred 0, 90 stock. 10 par...................................... 500,000 500,000 Common stock, 5 par............................................. 500,000 500,000 Retained earnings................................................. 6,180,000 5,375,000 Total stockholders' equity.......................................... 7,180,000 6,375,000 Total liabilities and stockholders' equity............................. 9,780,000 8,755,000 Instructions Determine the following measures for 20Y2, rounding to one decimal place including percentages, except for per-share amounts: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days sales in receivables 6. Inventory turnover 7. Number of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Times interest earned 11. Asset turnover 12. Return on total assets 13. Return on stockholders equity- 14. Return on common stockholders equity 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yieldarrow_forward
- Question no 3The market price of the ordinary shares at 31 December 2020 was Rs1.60. The dividend yield on ordinary shares was 2.5 per cent. The creditor for taxation at 31 December 2019 was Rs25 000. Taxation paid in the year ended 31 December 2020 amounted to Rs22 000. The liability for taxation on the profit of the year ended 31 December 2020 is Rs31 000 and is carried forward on the Taxation account. The retained profit for the year ended 31 December 2020 was Rs60 000. The debentures were issued in 2016. The preference shares were issued at par. The summarized Balance Sheet at 31 December 2020 of Iqra Ltd was as: Fixed assets 2550000, Net current assets 950000, 6% debentures 2019/2020 150000, Ordinary shares of Rs1, 2500000, 10% redeemable preference shares of Rs1, 300000, Share Premium account 200000 Profit and Loss Account 350000. REQUIRED Prepare Iqra Ltd’s Profit and Loss Account for the year ended 31 December 2020 in as much detail as possible. The Profit and Loss Account…arrow_forwardExercise 4 – 6On January 1, 2020, Blunt Co. purchased 50,000 ordinary shares of Powter Co. at ₱16 per share. The shares are classified as financial asset at fair value through other comprehensive income. Powter declared and paid dividends of ₱4 and ₱5 per share in 2020 and 2021, respectively. At the end of 2020 and 2021, Powter’s shares were trading at ₱17 and ₱14, respectively.1. Determine the dividend income recognized by Blunt on the equity instrument in 2020 and 2021.2. Determine the carrying amount of the equity instrument on Blunt’s statement of financial statement on December 31, 2020 and December 31, 2021.3. Determine the unrealized gain or loss on change in fair value recognized by Blunt in its profit or loss statement for the year ended December 31, 2020 and December 31, 2021.4. Determine the cumulative balance of the unrealized gain or loss recognized in the other comprehensive income of Blunt’s shareholders’ equity on December 31, 2020 and December 31, 2021.arrow_forwardBE17.5 (LO 2) Fairbanks Corporation purchased 400 shares of Sherman Inc. common stock for $13,200 (Fairbanks does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $34.50 per share. Prepare Fairbanks' journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) BE17.6 (LO 2) Use the information from BE17.5 but assume the stock is nonmarketable. Prepare Fairbanks' journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment, if any.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Accounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting (Text Only)
Accounting
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Financial instruments products; Author: fi-compass;https://www.youtube.com/watch?v=gvxozM3TUIg;License: Standard Youtube License