Question
In: Finance
Treasury stock carried in the Equity section as a contra-equity account reflects the price paid for...
Treasury stock carried in the Equity section as a contra-equity account reflects the price paid for the common stock repurchased. The account is said to report this as a _________ measure. This means that the measure is fixed at the acquisition price paid for the stock and does not vary with each reporting date so long as the Common Stock is held for reissuance.
Solutions
Expert Solution
ANSWER
COST METHOD
Treasury stock carried in the Equity section as a contra-equity account reflects the price paid for the common stock repurchased. The account is said to report this as a COST METHOD measure. This means that the measure is fixed at the acquisition price paid for the stock and does not vary with each reporting date so long as the Common Stock is held for reissuance.
Under the cash method, at the time of the share repurchase, the treasury stock account is debited to decrease total shareholder's equity. The cash account is credited to record the expenditure of company cash. If the treasury stock is later resold, the cash account is increased through a debit and the treasury stock account is decreased, increasing total shareholder's equity, through a credit. In addition, a treasury paid-in capital account is either debited or credited depending on whether the stock was resold at a loss or a gain.
jeff jeffy answered 2 years agoRelated Solutions
A contra asset represents A. an account such as Allowance for Doubtful Accounts which reflects a...
A contra asset represents
A. an account such as Allowance for Doubtful Accounts which
reflects a decline in the net
realizable value of accounts
receivable.
B. an account that is presented as a credit balance in the asset
section of the balance sheet.
C. an account such as Accumulated Depreciation.
D. all of the above.
Under the allowance method of accounting for
uncollectible accounts receivable, an actual write-off is recorded
as
A. a debit to Allowance for Doubtful Accounts and a...
Analyzing and Computing Average Issue Price and Treasury Stock Cost Following is the stockholders’ equity section...
Analyzing and Computing Average Issue Price and Treasury Stock
Cost
Following is the stockholders’ equity section from the Campbell
Soup Company balance sheet. (Note: Campbell’s uses shareowners’
equity in lieu of the more common title of stockholders’
equity.).
Shareholders' Equity (millions,
except per share amounts)
July 31, 2016
August 2, 2015
Preferred stock: authorized 40 shares; non issued
$ --
$ --
Capital stock, $.0375 par value; authorized 560 shares;
issued 323 shares
12
12
Additional paid-in capital
354
339...
Reconciling Common Stock and Treasury Stock Balances Assume this is the stockholders' equity section from the...
Reconciling Common Stock and Treasury Stock Balances
Assume this is the stockholders' equity section from the
Abercrombie & Fitch balance sheet.
Shareholders' Equity (thousands, except par value amounts)
January 28, 2012
January 29, 2011
Class A common stock-$0.01 par value: 150,000 shares authorized
and 104,800shares issues at January 28, 2012, and January 29, 2011,
respectively
$ 1,048
$ 1,048
Paid-in capital
319,451
289,732
Retained earnings
2,051,463
1,646,290
Accumulated other comprehensive income (loss), net of tax
7,118
(994)
Treasury stock at...
"Contributed Capital & Treasury Stock" The Contributed Capital section of Shareholders Equity of the financial statement...
"Contributed Capital & Treasury
Stock"
The Contributed Capital section of Shareholders Equity of the
financial statement usually includes the capital stock and
additional paid in capital. Discuss the FASB rationale for
requiring additional disclosures regarding capital stock and
additional paid in capital
Accounting for Treasury Stock: What are treasury stocks? Why
would a Corporation want to buy back its stock? Discuss the Cost
Method and the Par Value Method for accounting for Treasury
Stock.
Treasury Stock The Stockholders' Equity section of Zavala Industries' balance sheet on January 1, 2017, appeared...
Treasury Stock
The Stockholders' Equity section of Zavala Industries' balance
sheet on January 1, 2017, appeared as follows:
Common stock, $10 par, 10,000 shares issued and
outstanding
$100,000
Additional paid-in capital
50,000
Retained earnings
80,000
Total stockholders’ equity
$230,000
Required:
1. Identify and analyze the effect of each
transaction.
The following transactions occurred during 2017:
a. Reacquired 1,800 shares of common stock at $20
per share on July 1.
Activity
Financing
Accounts
Cash Decrease, Treasury Stock Increase
Statement(s)
Balance Sheet...
Treasury Stock The Stockholders' Equity section of Zavala Industries' balance sheet on January 1, 2017, appeared...
Treasury Stock
The Stockholders' Equity section of Zavala Industries' balance
sheet on January 1, 2017, appeared as follows:
Common stock, $10 par, 10,000 shares issued and
outstanding
$100,000
Additional paid-in capital
50,000
Retained earnings
80,000
Total stockholders’ equity
$230,000
Required:
1. Identify and analyze the effect of each
transaction.
The following transactions occurred during 2017:
a. Reacquired 1,400 shares of common stock at $20
per share on July 1.
Activity
Accounts
Statement(s)
How does this entry affect the accounting equation?...
Which of the following is NOT an account that appears in the Stockholders' Equity section of...
Which of the following is NOT an account that appears in the
Stockholders' Equity section of the balance sheet?
Treasury stock
Additional paid in capital
Capital stock
Dividends
The stockholder’s equity section of Doc Corporation’s balance as Paid-in Capital Preferred stock, 9%,$100 par value,...
The stockholder’s equity section of Doc Corporation’s balance as
Paid-in Capital
Preferred stock, 9%,$100 par value, non-cumulative,
10,000 shares authorized, 5,000 shares issued
and
outstanding............................................................
Common stock, $10 par value, 500,000 shares Authorized, 90,000
shares issued and
90,000 shares
outstanding............................................... Paid in
capital in excess of par- common stock.......................
Total Paid-in Capital
Retained
earnings.........................................................
Total Stockholder’s Equity
The following transactions affecting stockholder’s equity occurred
during the year:
of January 1, 2019 is presented below:
$ 500,000
900,000
200,000 $ 1,600,000...
The stockholder’s equity section of Doc Corporation’s balance as Paid-in Capital Preferred stock, 9%,$100 par value,...
The stockholder’s equity section of Doc Corporation’s balance as
Paid-in Capital
Preferred stock, 9%,$100 par value, non-cumulative,
10,000 shares authorized, 5,000 shares issued
and
outstanding............................................................
Common stock, $10 par value, 500,000 shares Authorized, 90,000
shares issued and
90,000 shares
outstanding............................................... Paid in
capital in excess of par- common stock.......................
Total Paid-in Capital
Retained
earnings.........................................................
Total Stockholder’s Equity
The following transactions affecting stockholder’s equity occurred
during the year:
of January 1, 2019 is presented below:
$ 500,000
900,000
200,000 $ 1,600,000...
1)What is the total stockholders' equity based on the following account balances? Common Stock $1750000 Paid-In...
1)What is the total stockholders' equity based on the following
account balances?
Common Stock
$1750000
Paid-In Capital in Excess of Par
130000
Retained Earnings
350000
Treasury Stock
75000
a)$2155000.
b)$2305000.
c)$1765000.
d)$2175000
2)
Sunland Company purchased treasury stock with a cost of $56700
during 2017. During the year, the company paid dividends of $20600
and issued bonds payable for proceeds of $902300. Cash flows from
financing activities for 2017 total
a)$77300 net cash outflow.
b)$825000 net cash inflow.
c)$881700 net...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Enumerations Create an advanced enumeration to represent months (JANUARY – DECEMBER) called enuMonths Add internal properties...
- What is the minimum size of the automorphism group of a simple directed graph having more...
- The birthday paradox says that the probability (chance) that two people in a room will have...
- #include <iostream> #include "lib.hpp" using namespace std; int main() { // declare the bool bool...
- Why do we compare means instead of individual scores? for comparing average SAT test scores across...
- NPV Your division is considering two projects with the following cash flows (in millions): 0...
- The equivalent synchronous impedance of a 25kVA, 400V three-phase Y-connected synchronous generator is 0.05 + j1.6...
ADVERTISEMENT