STOCK HOLDERS EQUITY AND RETAINED EARNINGS

Question 1

Components of Equity?

Answer 1

Preference Stock
+ Common Stock
+ Additional-Paid-in-Capital
+ Retained Earnings
+ Accumulated Other Comprehensive Income
- Treasury Stock
TOTAL SH Equity

Question 2

Irredeemable PS should be recorded to what BS account?

Redeemable PS should be recorded to what BS account?

Answer 2

Irredeemable = Equity

Redeemable = Liability

Question 3

What is the equation in calculating Non-Cumulative and Non-Participating Preferred Stock?

Answer 3

DIV on PS: (% on PS * PS $)
DIV on CS: ($ DIV DECL/PD) - (DIV on PS)

Question 4

Payable on each Stock? PS and CS?

Answer 4

=(P/S Cumulative + P/S Arrears) & (Total PS - C/S Declared)

Question 5

P/S is Given.
What is the $ C/S and $ APIC as a result of converting P/S to C/S?

Answer 5

Equation @ Issued of P/S?

Cash $
P/S $
APIC-PS $

Then Convert P/S to C/S by closing it 1st:

P/S $
APIC-PS. $
C/S. $
APIC-CS (Plug). $

Question 6

Effect of Property Dividend in R/E after nominal accounts are closed?

Answer 6

R/E = FV - CV

increase or decrease

Question 7

Items on Comprehensive Income?

Answer 7

Pension
Unrealized GL of AFS
Foreign Exchange Translation ADJ
Cash Flow Hedges

Question 8

Items on Retained Earnings?

Answer 8

Net Income
- net Loss
+/- Reclassification from AOCI
- Dividends
= End Bad on R/E

Question 9

What method of T/S, when repurchased stock are sold for more than the repurchase price?

It is also the method use when the entity intends to resell the shares indefinitely.

Answer 9

Cost Method

(Note: Gain/Loss recognized in Reissue not when Repurchased (recorded in APIC and RE) using Cost Method)

T/S. $
Cash. $

Question 10

What method of T/S, when repurchased stock are sold less than the repurchase price?

It is also the method use when the entity intends to hold shares indefinitely.

Answer 10

Par Value Method

(Note: Gain/Loss recognized when Repurchased (recorded in APIC and RE) using Cost Method)