Answered: Mandatory redeemable preferred stock…

Mandatory redeemable preferred stock must be classed as Stockholders' Equity on the balance sheet, according to FASB guidelines. False or True

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 39MCQ: Which of the following are not part of common equity? a. preferred stock c. retained earnings b....

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

Mandatory redeemable preferred stock must be classed as Stockholders' Equity on the balance sheet, according to FASB guidelines.

False or True.

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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Based on the rules issued by the FASB, mandatorily redeemable preferred stock has to be classified as a balance sheet Stockholders’ Equity. True Or False
Preferred stock: a. Is always recorded as a liability. b. Is always recorded as part of stockholders’ equity. c. Can have features of both liabilities and stockholders’ equity. d. Is not included in either liabilities or stockholders’ equity.
When preparing the stockholders' equity section of the balance sheet, assume that the following accounts have normal balances. Which of these account balances would not be an addition to the Paid-In Capital section? Group of answer choices Common Stock (credit balance) Treasury Stock (debit balance) Paid-In Capital in Excess Par Common Stock (credit balance) Preferred Stock (credit balance)
Redeemable preference shares will be shown under: a. Equity in the statement of financial position b. Non current liability in the statement of financial position c. Current asset in the statement of financial position d. Current liability in the statement of financial position
Preference shares, as noted in AASB 132: Select one: a. should be regarded as debt when redemption is at the option of the holder or on a specified date. b. will be classified as debt or equity based on their legal form rather than the substance of the financial instrument. c. exhibit the characteristics of equity when they are non-redeemable. d. will have their classification as debt or equity affected by the intention to make distributions in the future
Which of the following is an appropriate presentation of treasury stock? * O As a marketable security As a deduction at cost from total stockholders' equity As a deduction at cost from total contingent liabilities As a deduction at par from total stockholders' equity
Changes in the fair value of held to maturity securities are: A. not recognized. B. recognized on the income statement and as part of stockholders' equity. C. reported as part of stockholders' equity. D. recognized on the income statement.
Which one or more of the following would you not include within the heading Equity and Reserves in a company’s Statement of financial position: Revaluation reserve or Share premium account, or Redeemable Preference Shares or Dividend declared.
a. Which of the following disclosures regarding stock is not required to be reported on the balance sheet or in the notes to the financial statements? the par value and the number of shares authorized, issued, and outstanding. preferred stock characteristics, including dividend rate. any dividends in arrears. a list of names of stockholders.
Which of the following are not part of common equity? a. preferred stock c. retained earnings b. common stock d. treasury stock
Mandatorily redeemable preferred stock (preference shares) is reported among liabilities and their dividends are reported in the income statement as interest expense using a. U.S. GAAP. b. IFRS. c. Both U.S. GAAP and IFRS. d. Neither U.S. GAAP nor IFRS.
Which statement is true? a. Stock must have either a par or stated value b. If nominal, par value does not need to be disclosed on the balance sheet c. In most states, stock may issued at more or less than par value d. Par value does not suggest current fair value