Gen Combo Looseleaf Intermediate Accounting; Connect Access Card
10th Edition
ISBN: 9781260696325
Author: David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 18, Problem 18.5BE
To determine
Buyback of Shares
Retire stock:
Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares are known as retired shares.
To determine: The amount by which the paid in capital will decrease, if S Storage reacquires (retires) 1 million shares at $19 per share.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
.
Exercise 12-20 (Algo) Equity method; purchase; Investee Income; dividends [LO12-6]
As a long-term investment at the beginning of the 2024 fiscal year, Florists International purchased 25% of Nursery Supplies
Incorporated's 10 million shares for $65 million. The fair value and book value of the shares were the same at that time. During the
year, Nursery Supplies earned net income of $24 million and distributed cash dividends of $0.80 per share. At the end of the year, the
fair value of the shares is $61 million.
Required:
Prepare the appropriate journal entries from the purchase through the end of the year.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers
in millions, (i.e., 10,000,000 should be entered as 10).
View transaction list
Journal entry worksheet
<
1
2
3
4
Record the investment in Nursery Supplies shares.
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
December 31, 2020, the corporation's accounts included:
57:28
Common stock, 105 million shares at $1 par
Paid-in capital-excess of par
Retained earnings
sin
thousands)
$105,000
630,000
970,000
at
nces
a. November 1, 2021, the board of directors declared a cash dividend of $0.80 per share on its common shares, payable to
shareholders of record November 15, to be paid December
b On March 1, 2022, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that
Branch Rickie was holding as an investment. The bonds had a fair value of $1.6 million, but were purchased two years previously for
$1.3 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The…
Exercise 18-10 (Static) Retirement of shares [LO18-5]
Borner Communications' articles of incorporation authorized the issuance of 130 million common shares. The transactions described
below.effected changes in Borner's outstanding shares. Prior to the transactions, Borner's shareholders' equity included the following:
Shareholders' Equity
Common stock, 100 million shares at $1 par
Paid-in capital excess of par
Retained earnings
($ in millions)
$100
300
210
Required:
Assuming that Borner Communications retires shares it reacquires (restores their status to that of authorized but unissued shares).
record the appropriate journal entry for each of the following transactions: (If no entry is required for a transaction/event, select "No
Journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
1. On January 7, 2021, Borner reacquired 2 million shares at $5 per share.
2. On August 23, 2021, Borner reacquired 4 million…
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 - 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 - 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 - Prob. 18.14ECh. 18 - Prob. 18.16ECh. 18 - Prob. 18.20ECh. 18 - Prob. 18.22ECh. 18 - Prob. 18.25ECh. 18 - Various stock transactions; correction of journal...Ch. 18 - Prob. 18.1DMPCh. 18 - Prob. 18.6DMPCh. 18 - Prob. 18.8DMP
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
- A e NO 75% Î 14:06 Vo) LTE abc SAVE Тext Pen Brush On November 12, 2013, Berube Co. repurchased 10,000 shares of its own stock at a price of $20 per share. Berube had originally issued the stock in 2010 at a price of $15 per share. Which of the following items would be decreased by the stock repurchase transaction? (check all that apply) Total Shareholders' Equity Total Assets Cash from Financing Activities Total Liabilities Accumulated Other Comprehensive Income В I U !!! I!!arrow_forward22 method; ent for ation -6, LO12-7 Fizer Pharmaceutical paid $68 million on January 2, stock. The investment represents a 25% interest in the net assets of Carne and gave significant influence over Carne's operations. Fizer received dividends of $1 per share on December and Carne reported net income of $40 million for the year ended December 31, 2024. The fair value of Carne's common stock at December 31, 2024, was $18.50 per share.azA The book value of Carne's net assets was $192 million. vel The fair value of Carne's depreciable assets exceeded their book value by $32 million. These assets had an average remaining useful life of eight years. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. od; COME Required: Prepare all appropriate journal entries related to the investment during 2024. 000.2 On January 1, 2024, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction Company for…arrow_forwardQuestion 7 of 19 Fill in the blanks: The Maynard Corporation has outstanding 10,000 shares of 10%, P50 par-value, cumulative, nonparticipating preferred shares and 80,000, P10 par-value ordinary shares. There were no dividends in arrears. The board of directors voted to distribute P40,000 as dividends in 2020; P55,000 in 2021; and P65,000 in 2022 Fill in the blanks. DO NOT USE PESO SIGN, COMMA, NOR DECIMAL PLACES. 1. Total dividends paid to preferred shareholders in 2020 is P 2. Total dividends paid to ordinary shareholders in 2020 is P 3. Total dividends paid to preferred shareholders in 2021 is P 4. Total dividends paid to ordinary shareholders in 2021 is P 5. Total dividends paid to preferred shareholders in 2022 is P 6. Total dividends paid to ordinary shareholders in 2022 is P 7. Preferred dividend per share in 2020 is P 8. A shareholder who owns 5,000 Ordinary Shares will receive a total of P dividend in 2022. < Previousarrow_forward
- Question 14 (Group 13 & Group 5 [Acc]) Panyaroad Plc has just paid a dividend of USD 8 per share. The market value of share is USD 93. The following has been extracted from the Statement of Financial Position of Panyaroad Plc. USD Ordinary share capital 10,000@50 Retained Earnings 12% Redeemable debenture 1000@100 TOTAL (USD) 500,000 250,000 100,000 850,000 The market value of debenture is USD 95, redeemable three year from now. Dividend paid in previous yea is shown below: Year 1 2 3 5 6 Dividend Paid 7.25 8.00 5.45 5.90 6.00 7.40 The company is in a 35% tax bracket Required: Use divided valuation model to obtain the cost of equity Calculate after tax cost of debt i. ii. ii. Calculate Weighted Cost of Capital (WACC) using market value weights. iv. The above company wishes to raise an additional USD 100,000 to invest in a project which would produce USD 20,000 per annum indefinitely. a. If the company's capital structure is considered optimal, should the company undertake this project?…arrow_forwardQuestion 7 of 19 Fill in the blanks: The Maynard Corporation has outstanding 10,000 shares of 10%, P50 par-value, cumulative, nonparticipating preferred shares and 80,000, P10 par-value ordinary shares. There were no dividends in arrears. The board of directors voted to distribute P40,000 as dividends in 2020; P55,000 in 2021; and P65,000 in 2022arrow_forwardExercise 12-22 (Algo) Equity method; adjustment for depreciation [LO12-6, 12-7] Fizer Pharmaceutical paid $85 million on January 2, 2024, for 5 million shares of Carne Cosmetics common stock. The investment represents a 20% interest in the net assets of Carne and gave Fizer the ability to exercise significant influence over Carne's operations. Fizer received dividends of $3 per share on December 21, 2024, and Carne reported net income of $35 million for the year ended December 31, 2024. The fair value of Carne's common stock at December 31, 2024, was $35.50 per share. • The book value of Carne's net assets was $210 million. • The fair value of Carne's depreciable assets exceeded their book value by $50 million. These assets had an average remaining useful life of ten years. • The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Required: Complete the table below and prepare the appropriate journal entries…arrow_forward
- Exercise 18-11 (Algo) Retirement of shares [LO18-5] In 2024, Borland Semiconductors entered into the transactions described below. In 2021, Borland had issued 170 million shares of its $1 par common stock at $29 per share. Required: Assuming that Borland retires shares it reacquires, record the appropriate journal entry for each of the following transactions: Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). 1. On January 2, 2024, Borland reacquired 13 million shares at $28.00 per share. 2. On March 3, 2024, Borland reacquired 13 million shares at $31 per share. 3. On August 13, 2024, Borland sold 1 million shares at $37 per share. 4. On December 15, 2024, Borland sold 2 million shares at $31 per share. View transaction listarrow_forwardExercise 12-22 (Algo) Equity method; adjustment for depreciation [LO12-6, 12-7] Fizer Pharmaceutical paid $85 million on January 2, 2024, for 5 million shares of Carne Cosmetics common stock. The investment represents a 20% interest in the net assets of Carne and gave Fizer the ability to exercise significant influence over Carne's operations. Fizer received dividends of $3 per share on December 21, 2024, and Carne reported net income of $35 million for the year ended December 31, 2024. The fair value of Carne's common stock at December 31, 2024, was $35.50 per share. • The book value of Carne's net assets was $210 million. The fair value of Carne's depreciable assets exceeded their book value by $50 million. These assets had an average remaining useful life of ten years. • The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Required: Complete the table below and prepare the appropriate journal entries…arrow_forwardA e O Y l 66% 14:15 Vo) abc SAVE Text Pen Brush On November 12, 2013, Berube Co. repurchased 10,000 shares of its own stock at a price of $20 per share. Berube had originally issued the stock in 2010 at a price of $15 per share. Which of the following items would be decreased by the stock repurchase transaction? (check all that apply) Total Shareholders' Equity Total Assets Cash from Financing Activities Total Liabilities Accumulated Other Comprehensive Income В I U !!! !!!arrow_forward
- 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_forwardRequired information Problem 15-4A (Algo) Recording, adjusting, and reporting stock investments with insignificant influence LO P4 [The following information applies to the questions displayed below.] Rose Company had no short-term investments prior to this year. It had the following transactions this year involving short- term stock investments with insignificant influence. April 16 Purchased 6,000 shares of Gem Company stock at $29.25 per share. July 7 Purchased 3,000 shares of PepsiCo stock at $51.00 per share. July 20 Purchased 1,500 shares of Xerox stock at $18.00 per share. August 15 Received a $0.85 per share cash dividend on the Gem Company stock. August 28 Sold 3,000 shares of Gem Company stock at $36.00 per share. October 1 Received a $1.90 per share cash dividend on the PepsiCo shares. December 15 Received a $1.00 per share cash dividend on the remaining Gem Company shares. December 31 Received a $1.25 per share cash dividend on the PepsiCo shares. The year-end fair values…arrow_forward#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? Group of answer choices 41.62 42.85 41.70 42.03arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning