Inversely, when a share repurchase is seen as treasury stock, the cost of the treasury stock is naturally disclosed as a decrease in total shareholders’ equity. Alcoa would report the purchase of the treasury stock by debiting treasury stock and crediting cash for the charge of the purchase. The treasury stock ought to be disclosed independently in the shareholders' equity area of Alcoa’s balance sheet as an unallocated cut of shareholders' equity. These shares are treated as issued although not part of common stock outstanding. 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.
6. In addition to the three basic financial statements, which of the following is also a required financial statement? a. the "Cash Budget" b. the Statement of Cash Flows c. the Statement of Cash Inflows and Outflows d. the "Cash Reconciliation" 7. The statement of cash flows will not report the
If it did, how did the firm invest its excess cash? 6. If not, what were the sources of cash the firm used to pay for the capital expenditures and/or dividends? Sources of cash used to pay for capital expenditures and/or dividends are proceeds from long-term debt and short term borrowings. 7.
Cash flow from investing activities is cash inflows and outflows related to the purchase and disposal of long-lived productive assets and investments in the securities of other companies. Typical cash flows from investing activities include cash inflows from sale of property, plant, and equipment, sale of investments in debt or equity securities of other entities and collection of principal on loans to other entities. The cash outflows include purchase property, plant, and equipment, purchase of investments in debt or equity securities of other entities and to make loans to other entities. Cash flows from financing activities
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.
D) accounts denominated in foreign currency in foreign banks owned by domestic depositors. 5. Which of the following is not considered to be a factor of production? A) labor B) capital C) natural resources D) government Page 1 6. The focus of the Ricardian model is on: A) how countries' resource bases explain international trade.
Essentially, it shows what the company is trading through investments and financial exchanges. 2. Classification of activities Classify each of the following transactions as arising from an operating (O), investing (I), financing (F), or noncash investing/financing (N) activity. a. ___I_____ Received $80,000 from the sale of land.
1.4 Compare and contrast debt and equity as a source of funds for financial claims. Financial claims: written promises to pay a specific sum of money (the principal) plus interest for the privilege of borrowing money over a period of time. Financial claims are issued by DSUs (liabilities) and purchased by SSUs (assets). Debt Funds: Equity Funds: Funds supplied in the form of a loan. Classified into short-term or long-term facilities Short-term = money Long-term = capital Suppliers of loans or debt funds face credit risk Credit risk: the risk the borrower won’t pay back loan Funds supplied in the form of the acquisition of an ownership share of a business.
E) both B and C of the above. Answer: A Topic: Chapter 2.1 Function of Financial Markets Question Status: Previous Edition 3) Which of the following can be described as involving direct finance? A) A corporation's stock is traded in an over-the-counter market. B) People buy shares in a mutual fund. C) A pension fund manager buys commercial paper in the secondary market.
Assets that are ready for their intended use or sale when acquired are also not qualifying assets. Borrowing costs may include: i. Interest expense calculated using the effective interest rate method as described in MFRS 139 Financial Instruments: Recognition and Measurement, ii. Finance Charges in respect of finance leases recognized in accordance with MFRS 117 Leases, and iii. Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost.