If subsequently resold for a sum larger than the cost, Alcoa should report for the sale of the treasury stock by debiting cash for the sale cost, crediting treasury stock for cost, and crediting additional paid-in capital from repurchased stock for the excess of the selling price over the cost. Adversely, if the stock is retired, Alcoa
Peter Swap I. Issue: Will recognizing compensation expense as part of Mizri Corporation’s stock compensation plan faithfully represent the exchange? II. GAAP List: * 718-10-30-22: An equity instrument for which it is not possible to reasonably estimate fair value at the grant date shall be accounted for based on intrinsic value * 718-20-35-3: A modification of an equity award shall be treated as an exchange of the original award for a new award incurring additional compensation cost for any incremental value III. Alternatives: A.
D. balance sheet as an item of stockholders’ equity. 44) Which of the following statements is false? A. Cash dividends should be recorded as a liability when they are declared by the board of directors. B.
It includes options and warrants as well as debt and stock. "(2) Participation rights – contractual rights of security holders to receive dividends or returns from the security issuer’s profits, cash flows, or returns on investments. " "(3) Preferred Stock – a security that has preferential rights compare to capital stock. " (C) What information about securities must companies disclose? Discuss how Hincapie should report the proposed preferred stock issue.
Case 13-8 Accounting for a Loss Contingency for a Verdict on Appeal In this case we are presented with the scenario that a company faces a pending litigation. We are supposed to surmise how this liability will be reported, as well as, the resulting effects on the financials in the years in question. In my opinion, the primary accounting to be resolved is whether to accrue the liability, disclose the liability or simply count it is as immaterial and do nothing. As we progress through the scenario we are presented with subsequent facts which suggest that our decisions will indeed be impacted and changed due to litigation and we must act accordingly. The following are the questions asked by the case and my understanding of applicable GAAP.
Which of the following choices regarding the proprietary fund financial statements is true? A. The Statement of Net Assets (Balance Sheet) reflects equity as contributed equity and retained earnings. B. Normally, a reconciliation is required between the proprietary fund financial statements and the business-type activities column in the government-wide financial statements.
Prepare Post Closing Trial Balance Ratios 1. Debt ratio = Total liabilities Total assets Purpose: Show the ability of the company to repay its obligations when a company finances the purchase of assets using debt. A company with a low debt ratio will not have difficulty making the required payments. Generally a debt ratio below .60 is desirable. A ratio around .80 or 80% is considered high risk.
A. Is there a flaw in the consideration of the contract that would allow Giant to stop honoring the contract and allow it to buy from another vendor? II. Under agreed considerations on are current terms satisfactory to terminate agreement? A.
Debit - Duty or obligation to pay money, deliver goods, or render service under an express or implied agreement. Use of debt in a firm's financial structure creates financial leverage that can multiply yield on investment provided returns generated by debt exceed its cost. Because the interest paid on debt can be written off as an expense, debt is normally the cheapest type of long-term financing. 11. Yield - Annual income earned from an investment, expressed usually as a percentage of the money invested.
A covenant violation that gives the lender the right to call the debt has occurred at the balance sheet date or would have occurred absent a loan modification. * b. It is probable that the borrower will not be able to cure the default (comply with the covenant) at measurement dates that are within the next 12 months. (FASB 470-10-45) CE14-4 The following is the text of SAB Topic 4.A, Subordinated Debt. * Facts: Company E proposes to include in its registration statement a balance sheet showing its subordinate debt as a portion ofstockholders' equity.