CHAPTER 15

To download more slides, ebook, solutions and test bank, visit

CHAPTER 15

STOCKHOLDERS' EQUITY

IFRS questions are available at the end of this chapter.

TRUE-FALSE--Conceptual

Answer No. Description

T

1. State a corporation incorporates in.

F

2. Definition of preemptive right.

T

3. Common stock as residual interest.

F

4. Earned capital definition.

T

5. Reporting true no-par stock.

F

6. Allocating proceeds in lump sum sales.

T

7. Accounting for stock issued for noncash consideration.

F

8. Definition of treasury stock.

F

9. Reporting treasury stock under cost method.

T

10. Selling treasury stock below cost.

F

11. Participating preferred stock.

T

12. Callable preferred stock.

T

13. Restricting legal capital.

F

14. Disclosing dividend policy.

F

15. Affect of dividends on total stockholders' equity.

T

16. Property dividends definition.

T

17. Accounting for small stock dividend.

F

18. Stock splits and large stock dividends.

F

19. Computing rate of return on common stock equity.

T

20. Computing payout ratio.

Answer

c b a b c c d d d b a b a d b a d c

No.

21.

22.

23. S24. S25.

26.

27.

28.

29.

30.

31.

32. P33. S34. S35. S36. P37.

38.

MULTIPLE CHOICE--Conceptual

Description

Nature of stockholders' interest. Pre-emptive right. Pre-emptive right. Definition of legal capital. Definition of residual owner. Nature of stockholders' equity. Sources of stockholders' equity. Classification of stockholders' equity. Allocation methods for a lump sum issuance. Capital stock issued in payment of services. Costs of issuing capital stock. Creation of "secret reserves." Authorized shares. Par value stock. Legal restrictions for profit distributions. Acquisition of treasury shares. Treasury shares definition. Purchase of treasury stock at greater than par value.

To download more slides, ebook, solutions and test bank, visit

15 - 2 Test Bank for Intermediate Accounting, Fourteenth Edition

Answer

a a b c c b b c c b c c a a b b b b b a a b b c b a b c a c a a

No.

39. 40. 41. 42. 43. 44. P45. S46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. P67. *68. *69. *70.

MULTIPLE CHOICE--Conceptual (cont.)

Description

Sale of treasury stock. Reissued treasury stock at less than acquisition cost. Reissued treasury stock at greater than acquisition cost. Effect of treasury stock transactions. Preferred stock--debt features. Cumulative feature of preferred stock. Reporting redeemable stock. Reporting dividends in arrears. Issued vs. outstanding common stock. Timing of entry to record dividends. Shares entitled to receive a cash dividend. Accounting for a property dividend. Distribution of a property dividend. Liquidating dividend. Entry to record a liquidating dividend. Effects of a stock dividend. Effects of a stock dividend. Effect of a large stock dividend. Large stock dividend. Small stock dividend. Small stock dividend. Classification of stock dividends distributable. Effect of stock splits and stock dividends. Effect of a stock split. Disclosures in the balance sheet. Return on common stock equity calculation. Payout ratio calculation. Book value per share. Computing book value per share. Dividends and treasury stock. Noncumulative preferred stock and dividends in arrears. Disclosure of preferred dividends in arrears.

P These questions also appear in the Problem-Solving Survival Guide. S These questions also appear in the Study Guide.

*This topic is dealt with in an Appendix to the chapter.

MULTIPLE CHOICE--Computational

Answer No. Description

a

71. Composition of stockholders' equity.

b

72. Calculation of total paid-in capital.

b

73. Allocating proceeds in lump sum sales.

c

74. Allocating proceeds in lump sum sales.

d

75. Computing total paid-in capital.

b

76. Allocating proceeds in lump sum sales.

c

77. Allocating proceeds in lump sum sales.

To download more slides, ebook, solutions and test bank, visit

Stockholders' Equity

MULTIPLE CHOICE--Computational (cont.)

Answer No.

d

78.

d

79.

b

80.

c

81.

c

82.

d

83.

c

84.

a

85.

c

86.

c

87.

a

88.

a

89.

c

90.

d

91.

b

92.

d

93.

d

94.

a

95.

c

96.

a

97.

b

98.

b

99.

b 100.

a 101.

a 102.

c 103.

a 104.

d 105.

d 106.

c 107.

c 108.

a 109.

b 110.

c 111.

a 112.

b 113.

b 114.

b *115.

d *116.

b *117.

c *118.

b *119.

Description

Computing paid-in capital from treasury stock transactions. Recording purchase of treasury stock. Reissue treasury stock--above acquisition cost. Reissue treasury stock--cost method. Additional paid-in capital with treasury stock transactions. Calculation of additional paid-in capital. Calculation of additional paid-in capital. Total stockholders' equity with treasury stock transactions. Total stockholders' equity with treasury stock exchange. Calculate dividends for cumulative preferred shares. Calculate dividends for common shares. Calculate dividends for common shares. Reduction in retained earnings from property dividends. Reduction in retained earnings from property dividends. Reduction in retained earnings caused by a property dividend. Reduction in retained earnings from property dividends. Reduction in retained earnings from property dividends. Decrease in retained earnings from cash and stock dividends. Calculation of a large stock dividend. Calculation of a small stock dividend. Calculation of a small stock dividend. Small stock dividend's effect on retained earnings. Balance of retained earnings after a small stock dividend. Calculate retained earnings available for dividends. Calculate decrease in retained earnings. Calculate the payout ratio. Calculate book value per share. Calculate retained earnings available for dividends. Calculate decrease in retained earnings. Calculate rate of return on common stock equity. Calculate price-earnings ratio. Calculate dividends paid to common stockholders. Rate of return on common stock equity. Determine the rate of return on common stock equity. Determine book value per share. Computation of payout ratio. Computation of book value per share. Allocation of cash dividend to common and preferred shares. Cash dividends for cumulative preferred shares. Cash dividends for cumulative participating preferred shares. Cash dividend allocation with participating preferred shares. Cash dividend for cumulative preferred shares.

15 - 3

To download more slides, ebook, solutions and test bank, visit

15 - 4 Test Bank for Intermediate Accounting, Fourteenth Edition

Answer No.

d 120. b 121. c 122. b 123. c 124. d 125. b 126. d 127. d 128. a 129. c *130.

MULTIPLE CHOICE--CPA Adapted

Description

Capital stock issued in payment of services. Proceeds from preferred stock in lump sum issue. Determine paid-in capital from treasury stock. Reissue treasury stock--cost method. Effect of the reissuance of treasury stock. Entry to record property dividends declared. Effect of a liquidating dividend. Effect of a stock dividend. Stock dividend when market price exceeds par value. Balance of retained earnings following stock dividend. Allocation of cash dividend to common and preferred shares.

Item

E15-131 E15-132 E15-133 E15-134 E15-135 E15-136 E15-137 E15-138 E15-139 *E15-140 *E15-141

EXERCISES

Description

Lump sum issuance of stock. Treasury stock. Treasury stock. Treasury stock. Treasury stock. Stockholders' equity. Stock dividends. Stock dividends and stock splits. Computation of selected ratios. Dividends on preferred stock. Dividends on preferred stock.

Item

P15-142 P15-143 P15-144 P15-145 *P15-146

PROBLEMS

Description

Equity transactions. Treasury stock transactions. Stock dividends. Equity transactions. Dividends on preferred and common stock.

To download more slides, ebook, solutions and test bank, visit

Stockholders' Equity 15 - 5

CHAPTER LEARNING OBJECTIVES

1. Discuss the characteristics of the corporate form of organization. 2. Identify the key components of stockholders' equity. 3. Explain the accounting procedures for issuing shares of stock. 4. Describe the accounting for treasury stock. 5. Explain the accounting for and reporting of preferred stock. 6. Describe the policies used in distributing dividends. 7. Identify the various forms of dividend distributions. 8. Explain the accounting for small and large stock dividends, and for stock splits. 9. Indicate how to present and analyze stockholders' equity. *10. Explain the different types of preferred stock dividends and their effect on book value per

share.

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download