GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 18, Problem 18.18E
Effect of cumulative, nonparticipating
• LO18–7
The shareholders’ equity of ILP Industries includes the items shown below. The board of directors of ILP declared cash dividends of $8 million, $20 million, and $150 million in its first three years of operation—2018, 2019, and 2020, respectively.
| ($ in millions) | |
| Common stock | $100 |
| Paid-in capital—excess of par, common | 980 |
| Preferred stock, 8% | 200 |
| Paid-in capital—excess of par, preferred | 555 |
Required:
Determine the amount of dividends to be paid to preferred and common shareholders in each of the three years, assuming that the preferred stock is cumulative and nonparticipating.
| Preferred | Common |
| 2018 | |
| 2019 | |
| 2020 |
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#21
The ABC Company began operations in January 2018 and reported the following results for each of its three years of operations:
2018 – 799,500 net loss 2019 – 123,000 net loss 2020 – 2,460,000 net income
At December 31, 2020, ABC Company’s capital accounts were as follows:
8% cumulative preference share capital, 50,000 shares issued and outstanding – P 7,687,500
Ordinary share capital, 750,000 shares issued and outstanding – P 31,518,750
ABC Company has never paid a cash or bonus issue and there has been no change in its capital accounts since it began operations in 2018.
What is the book value per ordinary share at December 31, 2020?
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Problem 18-5 (Static) Shareholders' equity transactions; statement of shareholders' equity [LO18-6,18-
7,18-8]
Listed below are the transactions that affected the shareholders' equity of Branch-Rickle Corporation during the period 2021=2023. At
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57:28
Common stock, 105 million shares at $1 par
Paid-in capital-excess of par
Retained earnings
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970,000
at
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a. November 1, 2021, the board of directors declared a cash dividend of $0.80 per share on its common shares, payable to
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b On March 1, 2022, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that
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PROBLEM NO. 1
Watusi Inc. began operations in January 2021 and reported the following results for each of its 3
years of operations.
2021
P260,000 net loss
P40,000 net loss
P700,000 net income
2022
2023
At December 31, 2023, Watusi Inc. share capital accounts were as follows.
Share Capital-Preference, 6% cumulative, par value P100;
authorized, issued, and outstanding 5,000 shares
Share Capital-Ordinary, par value P1.00; authorized 1,000,000
shares; issued and outstanding 750,000 shares
P500,000
750,000
Watusi Inc. has never paid a cash or share dividend. There has been no change in the share
capital accounts since Watusi began operations. The country law permits dividends only from
retained earnings.
Instructions
a. Compute the book value of the ordinary shares at December 31, 2023.
b. Compute the book value of the ordinary shares at December 31, 2023, assuming that the
preference shares have a liquidating value of P106 per share.
Chapter 18 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
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
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