Stockholders’ equity : The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders. Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares. To journalize : The issuance of shares.

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Answer 1

Question

Chapter 18, Problem 18.8P

(1)

To determine

Stockholders’ equity:

The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.

Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares.

To journalize: The issuance of shares.

(2)

To determine

Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in the form of additional shares rather than cash. Stock dividends are paid, when there is inadequate cash available in the company.

Declaration date: The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date.

To Journalize: The declaration of share dividend.

(3)

To determine

To Journalize: the payment of the dividend on December 31, 2018.

(4)

To determine

Retirement of shares:

Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.

To Journalize: The retirement of the shares.

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O 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 Zero

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Answer 2

Question

Chapter 18, Problem 18.8P

(1)

To determine

Stockholders’ equity:

The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.

Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares.

To journalize: The issuance of shares.

(2)

To determine

Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in the form of additional shares rather than cash. Stock dividends are paid, when there is inadequate cash available in the company.

Declaration date: The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date.

To Journalize: The declaration of share dividend.

(3)

To determine

To Journalize: the payment of the dividend on December 31, 2018.

(4)

To determine

Retirement of shares:

Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.

To Journalize: The retirement of the shares.

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Answer 3

Question

Chapter 18, Problem 18.8P

(1)

To determine

Stockholders’ equity:

The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.

Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares.

To journalize: The issuance of shares.

(2)

To determine

Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in the form of additional shares rather than cash. Stock dividends are paid, when there is inadequate cash available in the company.

Declaration date: The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date.

To Journalize: The declaration of share dividend.

(3)

To determine

To Journalize: the payment of the dividend on December 31, 2018.

(4)

To determine

Retirement of shares:

Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.

To Journalize: The retirement of the shares.

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Answer 4

Question

Chapter 18, Problem 18.8P

(1)

To determine

Stockholders’ equity:

The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.

Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares.

To journalize: The issuance of shares.

(2)

To determine

Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in the form of additional shares rather than cash. Stock dividends are paid, when there is inadequate cash available in the company.

Declaration date: The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date.

To Journalize: The declaration of share dividend.

(3)

To determine

To Journalize: the payment of the dividend on December 31, 2018.

(4)

To determine

Retirement of shares:

Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.

To Journalize: The retirement of the shares.

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Answer 5

Chapter 18, Problem 18.8P

(1)

To determine

Stockholders’ equity:

The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.

Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares.

To journalize: The issuance of shares.

(2)

To determine

Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in the form of additional shares rather than cash. Stock dividends are paid, when there is inadequate cash available in the company.

Declaration date: The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date.

To Journalize: The declaration of share dividend.

(3)

To determine

To Journalize: the payment of the dividend on December 31, 2018.

(4)

To determine

Retirement of shares:

Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.

To Journalize: The retirement of the shares.

Answer 6

Chapter 18, Problem 18.8P

(1)

To determine

Stockholders’ equity:

The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.

Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares.

To journalize: The issuance of shares.

Answer 7

Chapter 18, Problem 18.8P

(1)

To determine

Stockholders’ equity:

The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.

Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for the purpose of share issuance would reduce the net cash proceeds from the sale of shares.

To journalize: The issuance of shares.

Answer 8

(2)

To determine

Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in the form of additional shares rather than cash. Stock dividends are paid, when there is inadequate cash available in the company.

Declaration date: The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date.

To Journalize: The declaration of share dividend.

Answer 9

(2)

To determine

Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in the form of additional shares rather than cash. Stock dividends are paid, when there is inadequate cash available in the company.

Declaration date: The date on which the board of directors of a corporation announces officially to distribute the dividends to its shareholders is referred as declaration date.

To Journalize: The declaration of share dividend.

Answer 10

(3)

To determine

To Journalize: the payment of the dividend on December 31, 2018.

Answer 11

(3)

To determine

To Journalize: the payment of the dividend on December 31, 2018.

Answer 12

(4)

To determine

Retirement of shares:

Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.

To Journalize: The retirement of the shares.

Answer 13

(4)

To determine

Retirement of shares:

Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.

To Journalize: The retirement of the shares.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 18 - Identify and briefly describe the two primary...Ch. 18 - Prob. 18.2Q Ch. 18 - Prob. 18.3Q Ch. 18 - Prob. 18.4Q Ch. 18 - Prob. 18.5Q Ch. 18 - Prob. 18.6Q Ch. 18 - Prob. 18.7Q Ch. 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...

Solution Summary: The author explains that stockholders' equity is sometimes referred to as net worth of owners or shareholders. Share issue costs reduce the net cash proceeds from the sale of shares.

To Journalize: the payment of the dividend on December 31, 2018.

Retirement of shares:

Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.

To Journalize: The retirement of the shares.

Want to see the full answer?

Chapter 18 Solutions

Solution Summary: The author explains that stockholders' equity is sometimes referred to as net worth of owners or shareholders. Share issue costs reduce the net cash proceeds from the sale of shares.

To Journalize: the payment of the dividend on December 31, 2018.

Retirement of shares: Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares. To Journalize: The retirement of the shares.

Want to see the full answer?

Chapter 18 Solutions

Retirement of shares:

Buy back of shares from the shareholders by paying cash and obtaining the status of “authorized but unissued shares” is known as retirement of shares.

To Journalize: The retirement of the shares.