Rock Bottom Gold Company recently repurchased 7.20 million shares of its common stock for $49 per share and is holding the shares as treasury stock. The intent of therepurchase was to increase earnings per share to be more in line with competitors. Required: Determine the impact of the stock repurchase on total assets, total liabilities,and total stockholders' equity. Prepare the journal entry to record the repurchase.

Treasury stockIt is a kind of stock that is repurchased from the stockholders by the company that…

Answered: Rock Bottom Gold Company recently…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Record the appropriate journal entry to reflect the following: The investments that Veggies-R-Us. Inc. currently has in their investment account (current asset) represents investments that were purchased recently. Based upon stock market auotes obtained for December 31, 20XX, the market value of these investments = $112,000. (It is management's intent to actively manage these shares for profit.) You have been provided with the partial Trail Balance for this company below: Veggies-R-Us. Trial Balance (Partial) December 31, 20XX Cash $26,750 (Debit) Accounts Receivable $47,630 (Debit) Allowance for doubtful accounts $250 (Debit) Prepaid rent $1,680 (Debit) Supplies $8,700 (Debit) Investments $113,520 (Debit) Furniture $15,350 (Debit)
The attached file contains hypothetical data for working this problem. Goodman Corporation’s and Landry Incorporated’s stock prices and dividends, along with the Market Index, are shown in the file. Stock prices are reported for December 31 of each year, and dividends reflect those paid during the year. The market data are adjusted to include dividends. On a stand-alone basis which corporation is the least risky?
BMJ company inc. plans to issue new common shares in order to increase its cash and cash equivalents and to finance its growth. Indicate the effect of this transaction on each of the following ratios by putting an "X" in the appropriate box: Augmentation/ Increase Diminution/Reduction/Decrease No effectThe cash ratio Total asset turnover The profitability of shareholders' equity The ratio of total liabilities to total assets
XYZ Corp. reported the following activity and balance sheet data for fiscal 2019: • The company declared cash dividends of $90. • The company issued bonds to raise cash in order to redeem bonds with a face value of $300 and to raise additional capital for expansion. • The company raised cash by issuing 50 shares of stock. • The company purchased treasury shares at a cost of $90. • Fiscal 2019 net income was $220. Dividends Payable Bonds Payable Common Stock, $1 Paid In Capital Retained Earnings Treasury Stock 12/31/19 30 1,700 550 1,770 1,670 140 1/1/19 20 1,500 500 1,350 1,540 50 Cash flow from/used in financing activities was: Enter a positive number for a cash inflow or a negative number for a cash outflow.
You are auditing the financial statements of Brin Inc. for the year 2020. The details of the unadjusted balances of its Accumulated Profit account are as follows: ACCUMULATED PROFIT Particulars Debit Credit Balance 500,000 540,000 740,000 670,000 690,000 660,000 580,000 150,000 730,000 640,000 Date Beginning Balance Gain on sale of treasury shares Net income for the year Payment of dividends declared in 2018 Paid in capital in excess of par Loss on sale of treasury shares Net loss for the year Net income for the year Payment of dividends declared in 2019 01.01.2018 08.31.2018 40,000 200,000 12.31.2018 02.28.2019 70,000 05.31.2019 20,000 07.31.2019 12.31.2019 12.31.2020 30,000 80,000 12.31.2020 90,000 Your examination disclosed the following: a. Omissions at the end of each year of the following: 2017 4,000 2018 2019 7,000 2020 Merchandise Inventory, end Accrued Expense 3,000 5,000 b. The cost of major repairs on the company's equipment on January 1, 2018 in the amount of P150,000 was…
You’ve been hired to perform an audit of Hubbard Company for the year ended December 31, 2019. You find the following account balances related to shareholders’ equity: Preferred stock, $100 par $ 33,000 Common stock, $10 par 68,000 Capital surplus (15,100) Retained earnings 172,000 Because of the antiquated terminology and negative balance, you examine the Capital Surplus account and find the following entries: Credit (Debit) Additional paid-in capital on common stock $ 27,700 Capital from donated land 16,900 Treasury stock (400 common shares at cost) (5,600) Additional paid-in capital on preferred stock 2,000 Stock dividend (50%) (20,000) Prior period adjustment (net of income taxes) (10,100) Loss from fire (uninsured), 2018 (18,100) Property dividend declared (5,600) Cash dividends declared (23,300) Balance $ (36,100) Your examination of the Preferred Stock and Common Stock accounts reveals that the amounts shown correctly state the…
You’ve been hired to perform an audit of Hubbard Company for the year ended December 31, 2019. You find the following account balances related to shareholders’ equity: Preferred stock, $100 par $ 33,000 Common stock, $10 par 68,000 Capital surplus (15,100) Retained earnings 172,000 Because of the antiquated terminology and negative balance, you examine the Capital Surplus account and find the following entries: Credit (Debit) Additional paid-in capital on common stock $ 27,700 Capital from donated land 16,900 Treasury stock (400 common shares at cost) (5,600) Additional paid-in capital on preferred stock 2,000 Stock dividend (50%) (20,000) Prior period adjustment (net of income taxes) (10,100) Loss from fire (uninsured), 2018 (18,100) Property dividend declared (5,600) Cash dividends declared (23,300) Balance $ (36,100) Your examination of the Preferred Stock and Common Stock accounts reveals that the amounts shown correctly state the…
You are engaged to perform the first audit of the Torrents Company for the year ended December 31, 2022. You find the following account balances related to shareholders' equity: Preference shares, P100 par P3,000,000 Ordinary Shares, P10 par 6,500,000 Capital Surplus (1,640,000) Retained Earnings 15,000,000 Due to the antiquated terminology and negative balance, you examine the Capitak Surplus account first and find in it the following entries: Credit/(Debit) Premium on Ordinary Shares P2,710,000 Capital from donated land 1,600,000 Treasury shares (50,000 ordinary shares at cost) (750,000) Premium on Preference Shares 300,000 Appropriation for contingencies 2,500,000 Share dividend issued (50%) (2,000,000) Prior period adjustment (net of income taxes) (1,200,000) Loss from the fire (uninsured), 2022 (1,800,000) Property dividend distributed (600,000) Cash dividends declared to be paid in 2023 (2,400,000) Balance (P1,640,000) Your examination of…
You are engaged to perform the first audit of the Torrents Company for the year ended December 31, 2022. You find the following account balances related to shareholders' equity: Preference shares, P100 par P3,000,000 Ordinary Shares, P10 par 6,500,000 Capital Surplus (1,640,000) Retained Earnings 15,000,000 Due to the antiquated terminology and negative balance, you examine the Capitak Surplus account first and find in it the following entries: Credit/(Debit) Premium on Ordinary Shares P2,710,000 Capital from donated land 1,600,000 Treasury shares (50,000 ordinary shares at cost) (750,000) Premium on Preference Shares 300,000 Appropriation for contingencies 2,500,000 Share dividend issued (50%) (2,000,000) Prior period adjustment (net of income taxes) (1,200,000) Loss from the fire (uninsured), 2022 (1,800,000) Property dividend distributed (600,000) Cash dividends declared to be paid in 2023 (2,400,000) Balance (P1,640,000) Your examination of…
SFP accounts of Sandhill Inc., which follows IFRS, follow: Debit accounts Cash FV-NI investments Accounts receivable Merchandise inventory Machinery Buildings Land Credit accounts Sandhill Inc. Comparative Statement of Financial Position Accounts December 31, 2023 and 2022 Allowance for expected credit losses Accumulated depreciation-machinery Accumulated depreciation-buildings Accounts payable Accrued liabilities Income taxes payable Long-term note payable-non-trade Common shares Retained earnings Additional information: 1 2 3. 4. 2023 $44,900 22,660 67,390 30,430 29,400 67,420 7,500 $269,700 $1,290 5,795 13,350 29,590 2,405 910 26,300 150,000 40,060 $269,700 2022 $33,400 40,000 59,900 24,400 Sandhill's 2023 statement of income is as follows: 18,250 56,250 7,500 $239,700 $540 2,420 8,850 24,350 1,160 1,410 Sandhill has adopted the policy of classifying interest paid as operating activities and dividends paid as financing activities. 31,300 125,000 44,670 $239,700 Cash dividends…
Sycip was tasked to analyze the earnings performance of Alamo Transport Corporation. The following data were gathered from Alamo's financial statements and from a report of the closing market prices of shares: Profit for 2020 6,643,000 Preference dividends declared during 2020 600,000 Ordinary dividends declared Dec 31, 2020 2,620,000 Number of Alamo ordinary shares outstanding: 01-Jan-20 1,500,000shares 31-Dec-20 1,600,000shares Market price per ordinary share on Dec 31, 150 2015 Calculate the following ratios relating to the Alamo share: 1. Basic earnings per ordinary share 2. Price-earnings ratio I
You have been asked by the VP of Finance to identify the appropriate accounting treatment for the following series of investments made by Metaphor Investments Inc.: (Round per share calculations to 1 decimal place in percentage.) . Purchased 32,400 of the 60,000 shares outstanding for The Natural Pharmacy Inc. • Purchased 29,400 of 60,000 shares outstanding for Metro Inc. . Purchased 44,200 of 65,000 shares outstanding for Le Petite Boulangerie Inc. • Purchased 27,000 of 50,000 shares outstanding for Wood Passion Ltd. Company The Natural Pharmacy Inc. Metro Inc. Le Petite Boulangerie Inc Wood Passion Ltd Percentage of purchased shares % % % % Treatment

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