会计学原理Financial Accounting by Robert Libby第八版 第十一(2)

Chapter 11 - Reporting and Interpreting Owners’ Equity

MINI- EXERCISES

M11–1.

Stockholders may:

a) Vote in the stockholders’ meeting (or by proxy) on major issues concerning management of the corporation. b) Participate proportionately with other stockholders in the distribution of the corporation’s profits. c) Share proportionately with other stockholders in the distribution of corporate assets upon liquidation.

Being able to vote is the most important of the rights because this ensures that the owners have an input at the stockholders’ meeting and some control of the management of the corporation, thus enabling them to protect their rights as stockholders. M11–2.

Unissued shares = 90,000 (268,000 – 178,000) M11–3.

Cash (170,000 $21) (+A) ...........................................3,570,000

Common Stock (170,000 $1) (+SE) ......................

Capital in Excess of Par (+SE) .................................

The journal entry would be different if the par value were $2:

Cash (170,000 $21) (+A) ...........................................3,570,000

Common Stock (170,000 $2) (+SE) ......................

Capital in Excess of Par (+SE) .................................

340,000 3,230,000

170,000 3,400,000

Chapter 11 - Reporting and Interpreting Owners’ Equity

M11–4.

Common stock is the basic voting stock issued by a corporation. It ranks after preferred stock for dividends and assets distributed upon liquidation of the

corporation. The dividend rate for common stock is determined by the board of directors, and is based on the company’s profitability. The dividend rate for

preferred stock is fixed by a contract. Common stock has more potential for growth than preferred stock if the company is profitable. On the other hand, the investor may lose more money with common stock than with preferred stock if the company is not profitable.

Usually, It is advisable to invest in the common stock if you believe the company will be profitable. Common stock will receive a higher return on the $100,000 than preferred stock would.

Chapter 11 - Reporting and Interpreting Owners’ Equity

M11–7.

April 15:

Retained Earnings (-SE) .............................................. Dividends Payable (+L) ............................................June 14:

Dividends Payable (-L) ................................................. Cash (-A) ..................................................................

65,000

65,000

65,000

65,000

M11–10.

Retained Earnings (-SE) .............................................. Common Stock (+SE) ..............................................

800,000

800,000

Chapter 11 - Reporting and Interpreting Owners’ Equity

EXERCISES

E11–1.

Computation of End of Year Balance for Treasury Stock:

Beginning balance Net increase

307,532,841 383,407,665

Ending balance

Computation of Shares Outstanding: E11–2.

Req. 1 The number of authorized shares is specified in the corporate charter: 300,000. Req. 2 Issued shares are the shares sold to the public: 160,000 Req. 3

Issued shares 160,000 Treasury stock

Issued shares Treasury stock

2,109,316,331 1,725,908,666

Shares Outstanding

Outstanding shares 135,000

Chapter 11 - Reporting and Interpreting Owners’ Equity

E11–3. Req. 1

Stockholders’ Equity

Contributed capital: Preferred stock, authorized 4,000 shares,

issued and outstanding, 3,000 shares ...................................................... $ 24,000 Common stock, authorized 103,000 shares,

issued and outstanding, 20,000 shares .................................................... 200,000 Capital in excess of par, preferred .............................................................. 36,000 Capital in excess of stated value, no-par common ..................................... 120,000 Total contributed capital .......................................................................... 380,000 Retained earnings .......................................................................................... 60,000 Total Stockholders’ Equity ....................................................................... Req. 2

The answer would depend on the profitability of the company and the stability of its earnings. The preferred stock has a 9% dividend rate. If the company earns more than 9%, the additional earnings would accrue to the current stockholders. If the company earns less than 9%, it would pay a higher rate to the preferred stockholders. E11–4.

Req. 1 ($30 x 90,000 shares) - $1,600,000 = $1,100,000 Req. 2 $900,000 - $1,000,000 + $800,000 = $700,000 Req. 3 90,000 shares – 80,000 shares = 10,000 shares Req. 4 EPS = $1,000,000 80,000 = $12.50

Chapter 11 - Reporting and Interpreting Owners’ Equity

E11–5.

Req. 1

a. Cash (5,600 shares x $20) (+A) ............................................ 112,000 Common stock (5,600 shares x $10) (+SE) ...................... Capital in excess of par, common stock (+SE) .................. Sold common stock at a premium. b.

Cash (1,000 shares x $25) (+A) ............................................ Common stock (1,000 shares x $10) (+SE) ...................... Capital in excess of par, common stock (+SE) .................. Sold common stock at a premium.

25,000

56,000 56,000 10,000 15,000

Req. 2

Stockholders’ Equity

Contributed capital: Common stock, par $10, authorized 11,500 shares, outstanding 6,600 shares ........................................ …… 此处隐藏：5452字，全部文档内容请下载后查看。喜欢就下载吧 ……