Showing 47-49 out of 51
ch15.doc-CHAPTER 15 STOCKHOLDERS’ EQUITY IFRS ques...
ch15.doc-CHAPTER 15 STOCKHOLDERS’ EQUITY IFRS questions
ch15.doc-CHAPTER 15 STOCKHOLDERS’ E...
ch15.doc-CHAPTER 15 STOCKHOLDERS’ EQUITY IFRS questions
Page 47
Stockholders’ Equity
Solution 15-145
(cont.)
(b)
Stockholders' equity
6% Preferred stock, $50 par value, 20,000 shares authorized,
6,000 shares issued and outstanding
$
300,000
Common stock, $10 par value, 60,000 shares authorized,
40,000 shares issued and outstanding
400,000
Common stock dividend distributable
40,000
Paid-in capital in excess of par
142,000
Total paid-in capital
882,000
Retained earnings—unappropriated*
$358,000
Appropriated for plant expansion
70,000
Total retained earnings
428,000
Total stockholders' equity
$1,310,000
*$440,000 – $90,000 – $72,000 + $150,000 – $70,000 = $358,000
*Pr. 15-146
—Dividends on preferred and common stock.
Rensing, Inc., has $800,000 of 8% preferred stock and $1,200,000 of common stock outstanding,
each having a par value of $10 per share. No dividends have been paid or declared during 2009
and 2010. As of December 31, 2011, it is desired to distribute $488,000 in dividends.
Instructions
How much will the preferred and common stockholders receive under each of the following
assumptions:
(a)
The preferred is noncumulative and nonparticipating.
(b)
The preferred is cumulative and nonparticipating.
(c)
The preferred is cumulative and fully participating.
(d)
The preferred is cumulative and participating to 12% total.
*Solution 15-146
(a)
Preferred
Common
Total
Current year's dividend (8% of $800,000)
$
64,000
$
—
$
64,000
Remainder to common
424,000
424,000
$
64,000
$424,000
$488,000
(b)
Preferred
Common
Total
Dividends in arrears, 8% of $800,000 for two years
$128,000
$
—
$128,000
Current year's dividend
64,000
—
64,000
Remainder to common
296,000
296,000
$192,000
$296,000
$488,000
(c)
Preferred
Common
Total
Dividends in arrears, 8% of $800,000 for two years
$128,000
$
—
$128,000
Current year's dividend
64,000
96,000
160,000
Participating dividend 10% ($200,000 ÷ $2,000,000)
80,000
120,000
200,000
$272,000
$216,000
$488,000
15 - 47
Page 48
Test Bank for Intermediate Accounting, Thirteenth Edition
*Solution 15-146
(cont.)
(d)
Preferred
Common
Total
Dividends in arrears, 8% of $800,000 for two years
$128,000
$
—
$128,000
Current year's dividend
64,000
96,000
160,000
Participating dividend (4%)
32,000
48,000
80,000
Remainder to common
—
120,000
120,000
$224,000
$264,000
$488,000
15 - 48
Page 49
Stockholders’ Equity
IFRS QUESTIONS
True/False
1.
In the United States, like many other countries, banks are major creditors as well as the
largest investors.
2.
The iGAAP statement of recognized income and expenses is identical to the U.S. GAAP
statement of retained earnings – beginning balance retained earnings, plus net income, less
dividends, equals ending balance retained earnings.
3.
When the statement of recognized income and expenses is utilized the requirement for
additional note disclosure is reduced.
4.
Under iGAAP compliance requirements the U.S. GAAP formatted income statement need not
be replaced with the iGAAP statement of recognized income and expenses.
5.
Under iGAAP compliance requirements the revaluation surplus is not considered contributed
capital.
Answers to True/False:
1.
False
2.
False
3.
False
4.
True
5.
True
Multiple Choice
1.
The accounting for treasury stock retirements under iGAAP
a.
is to charge the entire amount to paid-in capital.
b.
may have the excess charged to paid-in capital, depending on the original transaction
related to the issuance of the stock.
c.
is to charge the excess of the cost of treasury stock over par value to retained earnings.
d.
is to allocate the difference between paid-in capital and retained earnings.
2.
The Revaluation Surplus of iGAAP is
a.
similar to U.S. GAAP in that it allows both increases and decreases in valuation.
b.
similar to U.S. GAAP in that it only allows for the decrease in valuation.
c.
similar to U.S. GAAP in that it only allows for the increase in valuation.
d.
different than U.S. GAAP in that it allows the increase in valuation.
15 - 49
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