Copy of Chap018solutions2011

Copy of Chap018solutions2011 - Chapter 18 - Shareholders...

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Unformatted text preview: Chapter 18 - Shareholders Equity BRIEF EXERCISES Two attributes of other comprehensive income are reported: (1) components of comprehensive income created during the reporting period ($15 million in this instance) and (2) the comprehensive income accumulated over the current and prior periods ($50 million at the end of this year). The $50 million represents the cumulative sum of the changes in each component created during each reporting period (the disclosure note) throughout all prior years. Since this amount increased by $15 million, the balance must have been $35 million last year. ($ in millions) Cash (8 million shares x $12 per share) 96 Common stock (8 million shares x $1 par per share) ................................................ 8 Paid-in capital excess of par (remainder).................... 88 Lewellings paid-in capital excess of par will increase by $860,000: 4,000 hours x $240 less $100,000 par. Journal entry (not required): Legal expense (4,000 hours x $240)..................................... 960,000 Common stock (100,000 shares x $1 par per share) ............... 100,000 Paid-in capital excess of par (remainder).................... 860,000 Hamiltons shareholders equity will increase by $3,500,000 as a result of this transaction. Journal entry (not required): 18-1 Chapter 18 Shareholders Equity Brief Exercise 18-1 Brief Exercise 18-2 Brief Exercise 18-3 Brief Exercise 18-4 Chapter 18 - Shareholders Equity Inventory of motors (1,000 x $3,500).................................. 3,500,000 Common stock............................................................. 3,500,000 MLSs common shareholders will receive dividends of $18 million as a result of the 2011 distribution. Preferred Common 2009 $20 million * 2010 20 million ** 2011 32 million *** $ 18 million (remainder) * $24 million current preference (6% x $400 million), thus $4 million dividends in arrears. ** $24 million current preference (6% x $400 million), thus another $4 million dividends in arrears. *** $8 million dividends in arrears plus the $24 million current preference. Hortons total paid-in capital will decline by $17 million, the price paid to buy back the shares. Journal entry (not required): ($ in millions) Common stock (2 million shares x $1 par) 2 Paid-in capital excess of par (2 million shares x $9 * )........................................................ 18 Paid-in capital share repurchase (difference)..................... 3 Cash (2 million shares x $8.50 per share).................................. 17 * Paid-in capital excess of par: $900 100 million shares 18-2 Brief Exercise 18-5 Brief Exercise 18-6 Chapter 18 - Shareholders Equity Agees total paid-in capital will decline by $18 million because recording the transaction involves a $1 million reduction of retained earnings and an $18 million reduction in paid- in capital accounts....
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This note was uploaded on 03/29/2011 for the course ACC 311 taught by Professor Debruine during the Winter '08 term at Grand Valley State University.

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Copy of Chap018solutions2011 - Chapter 18 - Shareholders...

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