Share splits do not affect the assets liabilities equity or the aggregate par

Share splits do not affect the assets liabilities

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Share splits do not affect the assets, liabilities, equity or the aggregate par value of issued shares. It affects only the number of outstanding shares and par value per share. A memo entry is used to record share splits. Lesson 6. Quasi-reorganization ( Valix et al., 2015) This is defined as an accounting procedure whereby a financially troubled corporation, but with favorable future prospects, is allowed, but not required, to revalue its assets and liabilities and realign its equity, under the restriction of relevant provisions, in order to establish a “new start” in accounting sense. Quasi-reorganization may be performed by: 1. Revaluation of property, plant and equipment; and/or 2. Recapitalization The following are the basic approach to quasi-reorganization: 1. Assets, as well as liabilities, are revalued upwards o downwards. 2. Any resulting credit balance in revaluation surplus is used to wipe out any deficit (i.e., negative balance in the retained earnings account) 3. If recapitalization is performed, any resulting share premium shall also wipe out any deficit. 4. Disclosures required by relevant regulations are provided in the financial statements for minimum of three (3) years.
140 Assessment Task 8 I. Multiple Choice Theories 1. Nonstock dividends shall be recognized as liabilities on the a. Date of declaration b. Date of record c. Date of payment d. Date of issuing check 2. When shareholders may elect to receive cash in lieu of stock dividend, the amount to be charged to retained earnings is equal to a.Optional cash dividend b.Fair value of the shares c.Par value of the shares d.Book value of the shares 3. Treasury shares may be reissued as dividends, in which case what amount should be charged to retained earnings? 4. If the stock dividend is less than 20%, what amount of the retained earnings should be capitalized 5. An entity issued what is called a "20% stock dividend". At what amount per share should retained earnings be reduced for the transaction?
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