In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2024 to discontinue accounting for reacquired shares as treasury stock. Instead, shares repurchased will be viewed as having been retired, reassuming the status of unissued shares. As part of the change, treasury shares held were reclassified as retired stock. At December 31, 2023, UMC's balance sheet reported the following shareholders' equity. Common stock, $1 par Paid-in capital-excess of par Retained earnings Treasury stock (5.3 million shares at cost) Total shareholders' equity Required: Identify the type of accounting change this decision represents and prepare the journal entry to effect the reclassification of treasury shares as retired shares. (5 in millions) $ 265 1,060 1,086 (90) $ 2,321 Complete this question by entering your answers in the tabs below. Type of accounting change General Journal Prepare the journal entry to effect the reclassification of treasury shares as retired shares. required in the first account field. Do not round

In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2024 to discontinue accounting for reacquired shares as treasury stock. Instead, shares repurchased will be viewed as having been retired, reassuming the status of unissued shares. As part of the change, treasury shares held were reclassified as retired stock. At December 31, 2023, UMC's balance sheet reported the following shareholders' equity. Common stock, $1 par Paid-in capital-excess of par Retained earnings Treasury stock (5.3 million shares at cost) Total shareholders' equity Required: Identify the type of accounting change this decision represents and prepare the journal entry to effect the reclassification of treasury shares as retired shares. (5 in millions) $ 265 1,060 1,086 (90) $ 2,321 Complete this question by entering your answers in the tabs below. Type of accounting change General Journal Prepare the journal entry to effect the reclassification of treasury shares as retired shares. required in the first account field. Do not round

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 25P: The controller of Red Lake Corporation has requested assistance in determining income, basic...

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In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2018 to discontinue accounting for reacquired shares as treasury stock. Instead, shares repurchased will be viewed as having been retired, reassuming the status of unissued shares. As part of the change, treasury shares held were reclassified as retired stock. At December 31, 2017, UMC’s balance sheet reported the following shareholders’ equity: ($ in millions) Common stock, $1 par $ 300 Paid-in capital—excess of par 1,200 Retained earnings 1,156 Treasury stock (6.0 million shares at cost) (125 ) Total shareholders’ equity $ 2,531 Required:Identify the type of accounting change this decision represents and prepare the journal entry to effect the reclassification of treasury shares as retired shares.
The following account balances are available from the ledger of Sandhill Corporation on December 31, 2022: Common Shares (25,000 shares authorized and outstanding) Retained Earnings (Deficit) On January 2, 2023, the corporation put into effect a shareholder-approved reorganization by agreeing to pass the common shares over to the creditors in full payment of the $290,000 Notes Payable, writing up Buildings by $143,800, and eliminating the deficit. Assume that Sandhill follows ASPE. $1,175,000 (230,000) Prepare the required journal entries for the financial reorganization of Sandhill. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation (To record the elimination of the deficit against share capital) (To record write-up of buildings to fair value and record the…
The shareholders’ equity section of the M&M Co. as of December 31, 2019 consisted of the following: Share capital (P30 par) P3,000,000; Share premium P1,900,000; Accumulated profits and losses (P2,000,000). On January 1, 2020 M&M Co. put into effect a shareholder approved quasi reorganization by reducing the par value of the shares to P5 and eliminating the deficit against share premium. What amount should M&M Co. report as share premium immediately after the quasi reorganization? * P600,000 P1,500,000 P1,900,000 P4,000,000 None of the above
The corporation was established in 2019. The Corporation issued 100,000, 20 par value shares ofstocks at an issue price of 25. On May 1, 2020, the corporation issued 20,000 new shares at an issue price of 30 per share. The corporation reported a net income of 356,785 and 425,000 in 2019 and 2020, respectively. Dividends of ₱2 per share were declared and distributed to shareholders on March 31,2020. There were no dividends distributed on the first year of operation of the corporation. Make a Statement of Changes in Equity for the year 2020.
The corporation was established in 2019. The Corporation issued 100,000, 20 par value shares ofstocks at an issue price of 25. On May 1, 2020, the corporation issued 20,000 new shares at an issueprice of 30 per share. The corporation reported a net income of 356,785 and 425,000 in 2019 and 2020, respectively. Dividends of ₱2 per share were declared and distributed to shareholders on March 31,2020. There were no dividends distributed on the first year of operation of the corporation. Make a Statement of Changes in Equity for the year 2020.
Oakwood Inc. is a public enterprise whose shares are traded in the over-the-counter market. At December 31, 2018, Oakwood had 6,000,000 authorized shares of $10 par value common stock, of which 2,000,000 shares were issued and outstanding. The shareholders’ equity accounts at December 31, 2018, had the following balances: Transactions during 2019 and other information relating to the shareholders’ equity accounts were as follows: 1. On January 5, 2019, Oakwood issued at $54 per share, 100,000 shares of $50 par value, 9%, cumulative convertible preferred Stock. Each share of preferred stock is convertible, at the option of the holder, into 2 shares of common stock. Oakwood had 600,000 authorized shares of preferred stock. 2. On February 2, 2019, Oakwood reacquired 20,000 shares of its common stock for $16 per share. Oakwood uses the cost method to account for treasury stock. 3. On April 27, 2019, Oakwood sold 500,000 shares (previously unissued) of $10 par value common stock to the…
At the recent 51st Annual General Meeting of the Shareholders of GOIL Company limited held on Thursday, 20th August, 2020 at 11:00 am; shareholders were asked to vote on the following resolutions, among others: (I) To declare a dividend for the year ended December 31, 2019 (II) To elect Directors retiring by rotation (III) To authorize the Directors to fix the remuneration of the Auditors (IV) To fix the remuneration of the Directors Shareholders' were therefore requested to vote for, against or abstain from the aforementioned resolutions. REQUIRED: As a corporate finance analyst, you are required to a. Provide the implication of the above resolutions b. Provide reasons / justification for your choice of vote, bearing in mind the key objective of every firm- “maximization of shareholders wealth”. c. Enumerate the possible conflict of interest (agency problem) between the key stakeholders in each case
The controller of Red Lake Corporation has requested assistance in determining income, basic earnings per share, and diluted earnings per share for presentation on the companys income statement for the year ended September 30, 2020. As currently calculated, Red Lakes net income is 540,000 for fiscal year 2019-2020. Your working papers disclose the following opening balances and transactions in the companys capital stock accounts during the year: 1. Common stock (at October 1, 2019, stated value 10, authorized 300,000 shares; effective December 1, 2019, stated value 5, authorized 600,000 shares): Balance, October 1, 2019issued and outstanding 60,000 shares December 1, 201960,000 shares issued in a 2-for-l stock split December 1, 2019280,000 shares (stated value 5) issued at 39 per share 2. Treasury stockcommon: March 3, 2020purchased 40,000 shares at 38 per share April 1, 2020sold 40,000 shares at 40 per share 3. Noncompensatory stock purchase warrants, Series A (initially, each warrant was exchangeable with 60 for 1 common share; effective December 1, 2019, each warrant became exchangeable for 2 common shares at 30 per share): October 1, 201925,000 warrants issued at 6 each 4. Noncompensatory stock purchase warrants, Series B (each warrant is exchangeable with 40 for 1 common share): April 1, 202020,000 warrants authorized and issued at 10 each 5. First mortgage bonds, 5%, due 2029 (nonconvertible; priced to yield 5% when issued): Balance October 1, 2019authorized, issued, and outstandingthe face value of 1,400,000 6. Convertible debentures, 7%, due 2036 (initially, each 1,000 bond was convertible at any time until maturity into 20 common shares; effective December 1, 2019, the conversion rate became 40 shares for each bond): October 1, 2019authorized and issued at their face value (no premium or discount) of 2,400,000 The following table shows the average market prices for the companys securities during 2019-2020: Adjusted for stock split Required: Prepare a schedule computing: 1. the basic earnings per share 2. the diluted earnings per share that should be presented on Red Lakes income statement for the year ended September 30, 2020 A supporting schedule computing the numbers of shares to be used in these computations should also be prepared. Assume an income tax rate of 30%.
Ray Holt Corporation has retained you as a consultant on accounting policies and procedures. During 2019, the company engaged in a number of treasury stock transactions, having foreseen an opportunity to report its treasury stock as an asset and to recognize a profit in trading its own stock. The transactions were as follows: 1. Reacquired 120 shares of its $10 par common stock at $20 per share. The shares had originally been issued at $20 per share. 2. Reacquired 165 shares of its $10 par common stock at $23 per share. The shares had originally been issued at $20 per share. 3. Reacquired 45 shares of its $100 par preferred stock at $138 per share. The shares had originally been issued at $185 per share. 4. Sold all common treasury shares held at $27 per share. 5. Reacquired 160 shares of its $100 par preferred stock at $135 per share. The shares had originally been issued at $185 per share. 6. Retired all preferred shares held in the treasury. Required: 1. Next…
Entity A invested in 38,600 shares of a listed company on 1 October 2019 at a cost of $3.95 per share. On 31 December 2019, the shares have a market value of $3.45. Entity A is not planning on selling these shares in the short term and elects to hold them as Fair Value through Other Comprehensive Income. REQUIRED: (1) Measure the amounts of the financial asset recognised in the Statement of Financial Position as at 31 December 2019. (2) Measure the amounts recognised in the Statement of Profit or Loss for the financial asset of the year 2019. (3) Measure the amounts of the Fair Value Reserve recognised in the Statement of Financial Position as at 31 December 2019
In January 2020, Bramble Corp., a newly formed company, issued 11700 shares of its $12 par common stock for $17 per share. On July 1, 2020, Bramble Corp. reacquired 1170 shares of its outstanding stock for $14 per share. The acquisition of these treasury shares decreased total stockholders' equity. did not change total stockholders' equity. increased total stockholders' equity. decreased the number of issued shares.
On January 1, 2024, Sandhill Ltd. had the following shareholders' equity accounts: Common shares (1,010,000 issued) Retained earnings The company was also authorized to issue an unlimited number of $4 noncumulative preferred shares. As at January 1, 2024, none had been issued. During 2024, the corporation had the following transactions and events related to its shareholders' equity: Jan. 2 Issued 101,000 preferred shares for $50 per share. Paid quarterly dividend to preferred shareholders. Paid quarterly dividend to preferred shareholders. Issued 110,000 common shares for $1.70 per share. Paid quarterly dividend to preferred shareholders. Paid quarterly dividend to preferred shareholders and a $0.25 per share dividend to the common shareholders. 31 Loss for the year was $99,000. Mar. June 30 Aug. 12 Sept. 30 Dec. 31 Dec. (a) $1,515,000 1,818,000 31 Journalize the transactions and the entries to close dividends and the Income Summary account. (Credit account titles are automatically…