On June 30, 200E, a corporation declared a 10% ordinary stock dividend on its 100,000 ordinary shares issued and outstanding with a par value of P 10 per share. The fair value of the ordinary shares was P 30 per share. The foregoing stock dividend (bonus issue) would Choices; Not affect the total shareholders’ equity. Decrease the total shareholders’ equity by P 100,000. Decrease the total shareholders’ equity by P 200,000 Decrease the total shareholders’ equity by P 300,000

On June 30, 200E, a corporation declared a 10% ordinary stock dividend on its 100,000 ordinary shares issued and outstanding with a par value of P 10 per share. The fair value of the ordinary shares was P 30 per share. The foregoing stock dividend (bonus issue) would Choices; Not affect the total shareholders’ equity. Decrease the total shareholders’ equity by P 100,000. Decrease the total shareholders’ equity by P 200,000 Decrease the total shareholders’ equity by P 300,000

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter15: S Corporations

Section: Chapter Questions

Problem 4BCRQ

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Alert Companys shareholders equity prior to any of the following events is as follows: The company is considering the following alternative items: 1. An 8% stock dividend on the common stock when it is selling for 30 per share. 2. A 30% stock dividend on the common stock when it is selling for 32 per share. 3. A special stock dividend to common shareholders consisting of 1 share of preferred stock for every 100 shares of common stock. The preferred stock and common stock are selling for 123 and 31 per share, respectively. 4. A 2-for-1 stock split on the common stock, reducing the par value to 5 per share (assume the same date for declaration and issuance). The market price is 30 per share on the common stock. 5. A property dividend to common shareholders consisting of 100 bonds issued by West Company. These bonds are carried on the Alert Company books as an available-for sale investment at a fair value of 48,000 (which is also its cost); it has a current value of 54,000. 6. A cash dividend, consisting of a normal dividend and a liquidating dividend, on both the preferred and the common stock. The 10% preferred dividend includes a 2% liquidating dividend, and the 2.30 per share common dividend includes a 0.30 per share liquidating dividend (separate liquidating dividend contra accounts should be used). Required: For each of the preceding alternative items: 1. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. 2. Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income taxes).
A corporation issued 100 shares of $100 par value preferred stock for $150 per share. The resulting journal entry would include which of the following? A. a credit to common stock B. a credit to cash C. a debit to paid-in capital in excess of preferred stock D. a debit to cash
Effective May 1, the shareholders of Baltimore Corporation approved a 2-for-1 split of the companys common stock and an increase in authorized common shares from 100,000 shares (par value 20 per share) to 200,000 shares (par value 10 per share). Baltimores shareholders equity items immediately before issuance of the stock split shares were as follows: What should be the balances in Baltimores Additional Paid-in Capital and Retained Earnings accounts immediately after the stock split is effected?
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DEF Corporation currently have Ordinary Share Capital, P 20 par, 50,000 shares and replace it by issuing no-par share capital with a stated value of P 20. DEF also have balance of Ordinary Share Premium of P 250,000 and Retained Earnings of P 500,000. How much is the Total Shareholder's Equity after the replacement? A. 500,000.00 B. 1,750,000.00 C. 1,250,000.00 D. 1,000,000.00
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8. If a corporation reissued at P200 per share 100 shares of treasury stock that it had previously acquired for P280 per share and there wasn't any Share Premium- Treasury, it would debit a. Loss on Sale of Treasury Stock for P8,000. b. Share Premium-Ordinary for P8,000. Retained Earnings for P8,000. d. Treasury Stock for P8,000. а. С. 9. Corpuz, Inc. has issued 200,000 shares of P1 par value ordinary shares at P15. If it repurchases 5,000 shares during 2019 at P20, a. profit would decrease by P25,000. b. profit would decrease by P100,000. c. shareholders' equity would decrease by P25,000. d. shareholders' equity would decrease by P100,000. С. 10. On Sept. 1, 2019, Modesto Corp.; a newly formed corporation, had the following shares issued and outstanding: Ordinary Shares, no par, P10 stated value, 5,000 shares originally issued at P150 per share. Preference Shares, P10 par value, 1,500 shares originally issued at P250 per share. Modesto's Sept. 1, 2019 statement of shareholders' equity…
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