chapter 12- answers to book

chapter 12- answers to book - Chapter 12 Corporations:...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 12 Corporations: Retained Earnings and the Income Statement Short Exercises (5-10 min.) S 12-1 Req. 1 Journal DATE ACCOUNTS AND EXPLANATIONS POST. REF. DEBIT CREDIT July 31 Retained Earnings (16,000 × .10 × $15) 24,000 Common Stock (16,000 × .10 × $3) 4,800 Paid-in Capital in Excess of Par 19,200 Req. 2 The stock dividends have no effect on total assets. Req. 3 The stock dividends have no effect on total stockholders’ equity. Chapter 12 Corporations: Retained Earnings and the Income Statement 63
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(5-10 min.) S 12-2 Req. 1 a. Both cash dividends and stock dividends decrease Retained Earnings. b. Stock dividends have no effect on a liability. c. Stock dividends increase paid-in capital by the same amount that they decrease Retained Earnings. d. Cash dividends decrease both total assets and total stockholders’ equity, resulting in a decrease in the size of a company. Financial and Managerial Accounting 2/e Solutions Manual 64
Background image of page 2
(5–10 min.) S 12-3 Req. 1 Stockholders’ Equity (in millions except for par value per share) Paid-in capital: Common stock, $.50 ($1 / 2) par, 900 (450 × 2) shares authorized, 208 (104 × 2) shares issued. .…………. ................... $ 104 Paid-in capital in excess of par………………………. . 153 Total paid-in capital…………………………………. .. 257 Retained earnings. ........................................ ……………. 653 Other equity…………………………………………………. . (227 ) Total stockholders’ equity. ................................ ……. ...... $ 683 Req. 2 The Common stock account balance was unchanged . The Paid-in capital in excess of par account balance was unchanged . The Retained earnings account balance was unchanged . The Other equity account balance was unchanged . The Total stockholders’ equity was unchanged . Chapter 12 Corporations: Retained Earnings and the Income Statement 65
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(10 min.) S 12-4 Req. 1 Journal ACCOUNTS AND EXPLANATIONS POST. REF. DEBIT CREDIT a. Treasury Stock (1,300 × $6) 7,800 Cash 7,800 b. Cash (700 × $9) 6,300 Treasury Stock (700 × $6) 4,200 Paid-in Capital from Treasury Stock Transactions 2,100 Req. 2 Balance sheet at December 31, 2010 will report: Stockholders’ equity: Less: Treasury stock, 600 shares at cost ($6 per share)……………………………………. . $(3,600) (5 min.) S 12-5 Req. 1 Maximum amount of dividends: $465,000 ($505,000 $40,000) Req. 2 A lender may restrict a corporation’s dividend payments and treasury stock purchases in order to ensure that the company maintains a minimum level of equity. Financial and Managerial Accounting 2/e Solutions Manual 66
Background image of page 4
(5-10 min.) S 12-6 WRS Athletic Clubs, Inc. Income Statement
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 38

chapter 12- answers to book - Chapter 12 Corporations:...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online