Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Chapter 7, Problem 3QE
Following is the shareholders’ equity section of All-Wood Doors on a day
- a. Use the financial statement template below to show the financial statement effects of the following dividend events. (Assume that the events are independent.)
(1) Cash dividend declaration and payment of $1 per share
(3) Property dividend declaration and payment of shares representing a short-term investment in Screen Products, Ltd., with a fair value of $10,000
(3) 10% stock dividend
(4) 100% stock dividend
(5) 3-for-1 stock split
(6) 1-for-2 reverse stock split
- b. Which events changed the book value of common equity? Under what conditions will these events lead to future increases and decreases in
ROE ?
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What is the balance of retained earnings - unappropriated after the above transactions?
2. What are the total shares outstanding of FORTY CORP as of December 31, 2018?
3.
Beacon Corporation issued a 3 percent stock dividend on 37,000 shares of its $7 par common stock. At the time of the dividend, the
market value of the stock was $26 per share.
Required
a. Compute the amount of the stock dividend.
b. Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Cash Flow column,
indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected
by the event, leave the cell blank.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the amount of the stock dividend.
Stock dividend
Required >
Chapter 7 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
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- Entries for selected corporate transactions Nav-Go Enterprises Inc. produces aeronautical navigation equipment. Navo-Go Enterprises stockholders equity accounts, with balances on January 1, 20Y1, are as follows: The following selected transactions occurred during the year: Instructions 1. Enter the January 1 balances in T accounts for the stockholders equity accounts listed. Also prepare T accounts for the following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends Distributable; Stock Dividends; Cash Dividends. 2. Journalize the entries to record the transactions, and post to the eight selected accounts. Assume that the closing entry for revenues and expenses has been made and post net income of 775,000 to the retained earnings account. 3. Prepare a statement of stockholders equity for the year ended December 31, 20Y1. Assume that net income was 775,000 for the year ended December 31, 20Y6. 4. Prepare the Stockholders Equity section of the December 31, 20Y1, balance sheet.arrow_forwardAssume that as of January 1, 20Y8, Sylvester Con- suiting has total assets of $500,000 and total assets of $150,000. As of December 31, 20Y8, Sylvester has total liabilities of $200,000 and total stockholders’ equity of $400,000. (a) What was Sylvester’s stockholders’ equity as of January 1, 20Y8? (b) Assume that Sylvester did not pay any dividends during 20Y8. What was the amount of net income for 20Y8?arrow_forwardThe income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows: Includes both state and federal taxes. Brief Exercise 15-20 Calculating the Average Common Stockholders Equity and the Return on Stockholders Equity Refer to the information for Somerville Company on the previous pages. Required: Note: Round answers to four decimal places. 1. Calculate the average common stockholders equity. 2. Calculate the return on stockholders equity.arrow_forward
- Required 1. Explain the transaction(s) underlying each journal entry (a) through (d). 2. How many shares of common stock are outstanding at year-end? 3. What is the total paid-in capital at year-end? 4. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $695,000?arrow_forwardBeacon Corporation issued a 8 percent stock dividend on 35,000 shares of its $7 par common stock. At the time of the dividend, the market value of the stock was $30 per share. Required a. Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected by the event, leave the cell blank. Complete this question by entering your answers in the tabs below. Required A Required B Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected by the event, leave the cell blank. (Enter any decreases to account balances with a minus sign.)…arrow_forwardBeacon Corporation issued a 5 percent stock dividend on 39,500 shares of its $7 par common stock. At the time of the dividend, the market value of the stock was $27 per share. Required: a. Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of the stock dividend. Stock dividendarrow_forward
- Assume that a start-up manufacturing company raises capital through a series of equity issues. a. Using the financial statement, summarize the financial statement effects of the following transactions. Identify the account affected and use plus and minus signs to indicate the increases and decreases in the specific element of the balance sheet (assets, liabilities, components of shareholders’ equity). (1) Issues 100,000 shares of $1 par value common stock for $10 per share. (2) Receives land in exchange for 10,000 shares of $1 par common stock when the common stock is trading in the market at $15 per share. The land has no readily determinable market value b. In each case, how does the company measure the transaction? What measurement attribute is used?arrow_forwardBeacon Corporation issueda 4 percent stock dividend on 37,000 shares of its $8 par common stock. At the time of the dividend, the market value of the stock was S28 per share. Required a. Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected by the event, leave the cell blank. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of the stock dividend. Stock dividend Required B > Prev 18 of 20 Next >arrow_forwardBased on the following information what would the general journal look like, as well as the cash dividends, and the amount of retained earnings to be capitalized as a result of the stock dividend? The equity sections for Atticus Group at the beginning of the year (January 1) and end of the year (December 31) follow. Stockholders’ Equity (January 1) Common stock—$4 par value, 100,000 shares authorized, 40,000 shares issued and outstanding $ 160,000 Paid-in capital in excess of par value, common stock 120,000 Retained earnings 320,000 Total stockholders’ equity $ 600,000 Stockholders’ Equity (December 31) Common stock—$4 par value, 100,000 shares authorized, 47,400 shares issued, 3,000 shares in treasury $ 189,600 Paid-in capital in excess of par value, common stock 179,200 Retained earnings ($30,000 restricted by treasury stock) 400,000 768,800 Less cost of treasury stock (30,000) Total stockholders’ equity $ 738,800 The following transactions…arrow_forward
- es Kinkaid Company was incorporated at the beginning of this year and had a number of transactions. The following journal entries impacted its stockholders' equity during its first year of operations. Transaction a. b. C. d. General Journal Cash Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock Organization Expenses Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock Cash Accounts Receivable Building Notes Payable Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock Cash Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock Required: 2. How many shares of common stock are outstanding at year-end? 3. What is the total paid-in capital at year-end? 2. Number of outstanding shares 3. Total paid-in capital Debit 270,000 180,000 46,000 18,000 82,400 134,000 Credit 230,000 40,000 127,000 53,000 59,700 56,700 30,000 77,000 57,000arrow_forwardcan you please journalize the transactions and indicate the amount to be reported shares and for common shares at the end of the yeararrow_forwardKinkaid Company was incorporated at the beginning of this year and had a number of transactions. The following journal entries impacted its stockholders' equity during its first year of operations. Transaction a. b. C. d. General Journal Cash Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock Organization Expenses Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock Cash Accounts Receivable Building Notes Payable Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock Cash Common Stock, $25 Par Value Paid-In Capital in Excess of Par Value, Common Stock Required: 2. How many shares of common stock are outstanding at year-end? 3. What is the total paid-in capital at year-end? 2. Number of outstanding shares 3. Total paid-in capital Debit 270,000 170,000 44,000 18,500 81,800 136,000 Credit 245,000 25,000 126,000 44,000 59,900 54,400 30,000 80,000 56,000arrow_forward
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Stockholders Equity: How to Calculate?; Author: Accounting University;https://www.youtube.com/watch?v=2jZk1T5GIlw;License: Standard Youtube License