Gourmet Inc. issued $24 million of $1 par preferred stock on February 1, 2018. The company issued 1 million shares. The preferred stock has a 6% fixed annual cash dividend and no maturity date. Assume that the holder of the preferred shares has the option to require redemption. Requirements a. How would Gourmet account for the preferred stock dividends? b. What is the journal entry when the firm issued the preferred shares? Requirement a. How would Gourmet account for the preferred stock dividends? If Gourmet were a U.S. GAAP reporter then A. the entire proceeds would be classified as liability. Dividends are a reduction of equity. ○ B. the entire proceeds would be classified as equity. Dividends are a reduction of equity. ○ C. the shares would be classified as equity and the fixed dividend characteristic of the share would be recorded as a liability at the present value of an annuity. D. the shares would be classified as equity and the fixed dividend characteristic of the share would be recorded as a liability at its nominal value. Click to select your answer and then click Check Answer. ?

Gourmet Inc. issued $24 million of $1 par preferred stock on February 1, 2018. The company issued 1 million shares. The preferred stock has a 6% fixed annual cash dividend and no maturity date. Assume that the holder of the preferred shares has the option to require redemption. Requirements a. How would Gourmet account for the preferred stock dividends? b. What is the journal entry when the firm issued the preferred shares? Requirement a. How would Gourmet account for the preferred stock dividends? If Gourmet were a U.S. GAAP reporter then A. the entire proceeds would be classified as liability. Dividends are a reduction of equity. ○ B. the entire proceeds would be classified as equity. Dividends are a reduction of equity. ○ C. the shares would be classified as equity and the fixed dividend characteristic of the share would be recorded as a liability at the present value of an annuity. D. the shares would be classified as equity and the fixed dividend characteristic of the share would be recorded as a liability at its nominal value. Click to select your answer and then click Check Answer. ?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 19E: Lyon Company shows the following condensed income statement information for the year ended December...

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Stockholders' Equity Terminology A list of terms and a list of definitions or examples are presented below. Make a list of the numbers 1 through 12 and match the letter of the most directly related definition or example with each number Definitions and Examples Capitalizes retained earnings. Shares issued minus treasury shares. Emerson Electric will pay a dividend to all persons holding shares of its common stock on December 15, 2019, even if they just bought the shares and sell them a few days later. The accumulated earnings over the entire life of the corporation that have not been paid out in dividends. Common Stock account balance divided by the number of shares issued. The state of Louisiana set an upper limit of 1,000,000 on the number of shares that Gumps Catch Inc. can issue. Shares that never earn dividends. Any changes to stockholders equity from transactions with no owners. A right to purchase stock at a specified future time and specified price. j. A stock issue that requires no journal entry. k. Shares that may earn guaranteed dividends. 1. On October 15, 2019, General Electric announced its intention to pay a dividend on common stock.
Raun Company had the following equity items as of December 31, 2019: Preferred stock, 9% cumulative, 100 par, convertible Paid-in capital in excess of par value on preferred stock Common stock, 1 stated value Paid-in capital in excess of stated value on common stock| Retained earnings The following additional information about Raun was available for the year ended December 31, 2019: 1. There were 2 million shares of preferred stock authorized, of which 1 million were outstanding. All 1 million shares outstanding were issued on January 2, 2016, for 120 a share. The preferred stock is convertible into common stock on a 1-for-1 basis until December 31, 2025; thereafter, the preferred stock ceases to be convertible and is callable at par value by the company. No preferred stock has been converted into common stock, and there were no dividends in arrears at December 31, 2019. 2. The common stock has been issued at amounts above stated value per share since incorporation in 2002. Of the 5 million shares authorized, 3,580,000 were outstanding at January 1, 2019. The market price of the outstanding common stock has increased slowly but consistently for the last 5 years. 3. Raun has an employee share option plan where certain key employees and officers may purchase shares of common stock at 100% of the marker price at the date of the option grant. All options are exercisable in installments of one-third each year, commencing 1 year after the date of the grant, and expire if not exercised within 4 years of the grant date. On January 1, 2019, options for 70,000 shares were outstanding at prices ranging from 47 to 83 a share. Options for 20,000 shares were exercised at 47 to 79 a share during 2019. During 2019, no options expired and additional options for 15,000 shares were granted at 86 a share. The 65,000 options outstanding at December 31, 2019, were exercisable at 54 to 86 a share; of these, 30,000 were exercisable at that date at prices ranging from 54 to 79 a share. 4. Raun also has an employee share purchase plan whereby the company pays one-half and the employee pays one-half of the market price of the stock at the date of the subscription. During 2019, employees subscribed to 60,000 shares at an average price of 87 a share. All 60,000 shares were paid for and issued late in September 2019. 5. On December 31, 2019, there was a total of 355,000 shares of common stock set aside for the granting of future share options and for future purchases under the employee share purchase plan. The only changes in the shareholders equity for 2019 were those described previously, the 2019 net income, and the cash dividends paid. Required: Prepare the shareholders equity section of Rauns balance sheet at December 31, 2019. Substitute, where appropriate, Xs for unknown dollar amounts. Use good form and provide full disclosure. Write appropriate notes as they should appear in the publisher financial statements.
Anoka Company reported the following selected items in the shareholders equity section of its balance sheet on December 31, 2019, and 2020: In addition, it listed the following selected pretax items as a December 31, 2019 and 2020: The preferred shares were outstanding during all of 2019 and 2020; annual dividends were declared and paid in each year. During 2019, 2,000 common shares were sold for cash on October 4. During 2020, a 20% stock dividend was declared and issued in early May. At the end of 2019 and 2020, the common stock was selling for 25.75 and 32.20, respectively. The company is subject to a 30% income tax rate. Required: 1. Prepare the comparative 2019 and 2020 income statements (multiple-step), and the related note that would appear in Anokas 2020 annual report. 2. Next Level Compute the price/earnings ratio for 2020. How does this compare to 2019? Why is it different?
Lyon Company shows the following condensed income statement information for the year ended December 31, 2019: Lyon declared dividends of 6,000 on preferred stock and 17,280 on common stock. At the beginning of 2019, 10,000 shares of common stock were outstanding. On May 1, 2019, the company issued 2,000 additional common shares, and on October 31, 2019, it issued a 20% stock dividend on its common stock. The preferred stock is not convertible. Required: 1. Compute the 2019 basic earnings per share. 2. Show the 2019 income statement disclosure of basic earnings per share. 3. Draft a related note to accompany the 2019 financial statements.
Terrific Comfort Specialists , Inc. reported the following stockholders ' equity on its balance sheet at June 30, 2018 Requirement 2. What is the par value per share of Terrific Comfort Specialists ' preferred stock ?
I need help with preparring a journal entry using the following. Billy Bob Corporation issued 220,000 shares of $20 par value, 7% preferred stock on January 1, 2020, for $4,950,000. In December 2021, Billy Bob declared its first dividend of $800,000. How do you calculate the Common Stock and "Paid-In" results?
Alpha company reported the following equity accounts on January 1, 2020. Tpoint hare capital, P20 par, P8,000,000; Share premium, P2,750,000; Retained earnings. P1,275,000. All shares outstanding on January 1 were issued for P26 a share. On December 31. the entity reacquired 20,000 shares at P24 a share and retired them. What is the balance of the share premium?
Template Company provided the following concerning marketable equity securities held as "trading." 1. The entity carried the following securities on December 31, 2022: 2. On June 30, 2023, the entity sold all the B ordinary shares for P140,000. 3. On December 31, 2023, the securities are quoted as follows: A ordinary - 4,000 shares B ordinary - 1,000 shares C preference - 2,000 shares A ordinary - 4,000 shares C preference -2,000 shares Requirement: Complete the table below. Write zero (0) if it is not applicable. Statement of Financial Position Investments - FVPL Statement of Changes in Equity Retained earnings Statement of Income Unrealized gain/(loss) Realized gain/(loss) Acquisition Date [a] [d] [9] 0] Cost 330,000 200,000 300,000 830,000 Market P80 per share P180 per share December 31, 2022 300,000 160,000 310,000 770,000 [b] [e] [h] [k] December 31, 2023 [c] [U] 0 [0]
In additin to the above question: Prepare the company’s Stockholders equity section of the balance sheet at December 31, 2021. (Hint!!!!!!!) The following information must be clearly stated/shown: information on par or par values for all classes of shares which must be shown separately. the number of shares authorized and issued where necessary. the sub total for the total paid in capital. Retained earnings. total stockholders’ equity.
1. Prepare the journal entry to record Tamas Company's issuance of 6,900 shares of $100 par value, 9% cumulative preferred stock for $104 cash per share. 2. Assuming the facts in part 1, if Tamas declares a year-end cash dividend, what is the amount of dividend paid to preferred shareholders? (Assume no dividends in arrears.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry to record Tamas Company's issuance of 6,900 shares of $100 par value, 9% cumulative preferred stock for $104 cash per share. View transaction list Journal entry worksheet
(b) Your answer is incorrect. If the preferred stock is not cumulative, how much of the $800,000 would be paid to common stockholders? Common Stock Dividends $ I
Beacon Corporation issued a 4 percent stock dividend on 37,500 shares of its $8 par common stock. At the time of the dividend, the market value of the stock was $21 per share. Required a. Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of the stock dividend. Slock dividend C Raquired A Required B >