Concept explainers
Retirement of shares
• LO18–5
Agee Storage issued 35 million shares of its $1 par common stock at $16 per share several years ago. Last year, for the first time, Agee reacquired 1 million shares at $14 per share. Assuming that Agee retires shares it reacquires (restores their status to that of authorized but unissued shares), by what amount will Agee’s total paid-in capital decline if it now reacquires 1 million shares at $19 per share?
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Chapter 18 Solutions
INTERMEDIATE ACCOUNTING
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- Stock Price after Recapitalization Lee Manufacturings value of operations is equal to 900 million after a recapitalization. (The firm had no debt before the recap.) Lee raised 300 million in new debt and used this to buy back stock. Lee had no short-term investments before or after the recap. After the recap, wd = 1/3. The firm had 30 million shares before the recap. What is P (the stock price after the recap)?arrow_forwardQuestion 8 At the end of 2020, Diego Corporation reported a $40,000 balance in its common share account (stated value $5 per share). The treasury share account showed $720 (cost $6 per share). No dividends were paid during the first two years. During 2020 the company declared and paid a cash dividend at $1.50 per share. Calculate the total amount of the 2020 cash dividend.arrow_forwardExercise 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_forward
- 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_forwardQuestion 3 Shares of Modern Data are selling for $150 per share. There are three million shares outstanding. What will be the share price if the company repurchases 345,000 of its shares at $150 apiece? Ignore taxes. $150. $169.50. Not possible to determine. $130.5. $168.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 28 (AICPA Adapted) Miraflores owned 10,000 shares in Maquiling Company acquired several years ago at P100 per share to be held as a long-term investment. Beginning in 2015, Miraflores received a dividend of P40 per share. Maquiling Company notifies the investor that a portion of this amount represented earnings and the balance as liquidating dividends. The allocation to be made as follows: Earned Dividend Liquidating Dividend 2015 P40 2016 P10 Р30 2017 P15 P25 2018 P20 P20 2019 P25 P15 Requirements: 1. Prepare journal entries on the books of the investor from 2015 to 2019. NDANarrow_forwardPROBLEM 28 (AICPA Adapted) Miraflores owned 10,000 shares in Maquiling Company acquired several years ago at P100 per share to be held as a long-term investment. Beginning in 2015, Miraflores received a dividend of P40 per share. Maquiling Company notifies the investor that a portion of this amount represented earnings and the balance as liquidating dividends. The allocation to be made as follows: Earned Dividend Liquidating Dividend 2015 P40 2016 P10 P30 2017 P15 P25 2018 P20 P20 2019 P25 P15 Requirements: 1. Prepare jourmal entries on the books of the investor from 2015 to 2019.arrow_forwardO Zero On July 1, 2020, ABC Corporation invested in the stocks of XYZ foreign corporation, by acquiring 10,000 shares at P12/share. On December 20, 2020, XYZ declared a 20% stock dividend payable on January 15, 2021. On January 2, 2021, ABC Corporation sold 10,000 shares for P13/share. Compute the net capital gain to be included in regular income. O30,000 O 15,000 O 10,000 O Zeroarrow_forward
- 51. What is the amount of dividend per share that MOONSTONE paid on March 31, 2021? 1.50 0.85 1.59 1.70 No answer from the given choices. 52. How much is the ordinary share capital, December 31, 2021? 24,531,000 24,498,800 18,870,000 17,000,000 No answer from the given choices. 53. How much will is the total cash dividends paid during the year 2021? 9,000,000 6,750,000 12,399,900 12,439,800 No answer from the given choices. 54. Number of fractional warrants outstanding as of December 31, 2021 66,100 13,220 52,880 0 No answer from the given choices. 55. How much is the retained earnings appropriated for contingency loss? 300,000 200,000 250,000arrow_forward(b) Your answer is incorrect. What is the average issue price per share after your recommendation in part (a)? (Round answers to 2 decimal places, e.g. 15.25.) The average issue price per share 158.82arrow_forwardQUESTION 17 If a company has 2240 million shares outstanding and each share is worth AUD 3.60 the market capitalization (value of the company) is million AUD. The company seeks to raise AUD 728 million by selling new shares with a subscription price of AUD 2.60, therefore it has to issue million new shares. After issuing these new shares successfully its new market capitalization will be million AUD and the total amount of shares will grow to million. As a result the value of each share after the issue will be AUD. The difference between the subscription price and the share price after the issue is AUD. Therefore, it is worth to pay up to AUD for the RIGHT to buy shares at AUD 2.60. Compare the old share price with the share price after the issue. It dropped by AUD. The ratio of the number of old shares to newly issued shares is exactly . This is also the number of old shares you need to get ONE RIGHT for a new share. HINT: Check if old shareholders' losses can be recovered by selling…arrow_forward
- Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
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