This choice does, however, affect how individual shareholders’ accounts are reported in the balance sheet. Formally retiring shares restores the balances in both the common stock account and paid-in capital - excess of par to how those balances would have looked if the shares never had been issued. Any net increase in assets produced from the sale and ensuing repurchase is reflected as Paid-in capital—share repurchase. On the other hand, any net decrease in assets resulting from the sale and subsequent repurchase is repeated as a subtraction of retained earnings. 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.
ABC Corporation Case Ashley White Hudson; Kim Crayton; Brenda Fountain; Latisha Blackmon ETH 376 May 28th, 2012 Juan C. Vargas ABC Corporation Case ABC Corporation is a large publically held corporation that is in the process of being audited by external auditors from the CPA firm, Green & Associates. Issues relating to audit opinions, internal controls, valuation methods, compliance with SOX, GAAS, and GAAP rules and ethical points involving ABC Corporation and Green & Associates will be discussed. ABC Corporation was utilizing the FIFO inventory method for the current year to declare a lower gross profit which reflects a lower net income in order to pay lower taxes and increase their cash flow. FIFO method is used when a company uses old inventory first (First In First Out) so that they can prevent the inventory from being obsolescence and/or be sold at a stable price. By using this method the income statement shows a higher income due to the lower value of the cost of goods sold.
3. What amounts should be recognized in the financial statements for the $25 million payment on June 15, 2012? The 2012 balance sheet will reflect a decrease (dr) in the Sales/Use Tax Payable account and a decrease (cr) in the Cash account. This is reflected in ASC250-10-50-8. 4.
Explain. c. Should the nominal cost of debt or the effective annual rate be used? Explain. d. How valid is an estimate of the cost of debt based on the yield to maturity of Ace’s debt (ignore the call provision in 3 years) if the firm plans to issue 20-year long-term debt? e. What other methods could be used to estimate the cost of debt if, for example, Ace’s outstanding debt had not been traded recently?
Restatement of Financial Results ACC/537 This paper reviews the restatement of financial results of Kodiak Energy, Inc. for the fiscal quarter ended September 30, 2007 and the year ended December 1, 2007. The company was forced to issue a restatement because of financial accounting errors in measurement and in the application of Generally Accepted Accounting Principles in the September 2007 acquisition of the Thunder River assets. On the original financial statement, Kodiak Energy reported issuing seven million common stocks of its company in order to acquire assets owned by Thunder River Energy. In their 10-k and 10-Q statements, Kodiak Energy reported a value of $2 per share at the time of the transaction. However, an investigation by the Securities and Exchange Commission (SEC) revealed
Review the article: Is your own buying behavior influenced by coupons and sales? Why do you think J.C. Penney’s pricing strategy has not been successful as compared to other “low price” proponents like Walmart? Will Ron Johnson’s four-year plan be successful over the long-term? Why or why not? BUS 620 Week 4 DQ 1 Purchase here http://chosecourses.com/BUS%20620%20/bus-620-week-4-dq-1 Description This paperwork of BUS 620 Week 4 DQ 1 shows the solution to the following point: The Role of Pricing Mohammed, R. (2012).
The commonly referenced Bail out proposal is in effect an emergency economic stabilization act aimed towards purchasing distressed assets ( most of which being mortgage back securities) and to help make monetary injections into various highly inlfuencial US banks. The banks in question are by and large mostly U.S. or foreign banks who's intricate investment into the US economy was deemed crucial enough to warrant the relief. The original proposal was three pages, the purpose of the plan was to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. The first draft amendment was rejected through a vote of the House of Representatives on September 29, 2008, by a margin of 228-205, with this defeat government
In fiscal year 2008, the return on invested capital of continuing operations was 9.5% compared to fiscal year 2007’s 13.9%. The decrease reflects the decrease in operating profit that also impacts the rationalization charges. If the rationalization charges are excluded the return on invested capital for continuing operations would have been 11.4% (Phillips, Libby, Libby, 2011). The cash flow statement shows the movement of cash within a company. The cash flow statement is split into three categories: operating activities, investing activities, and financing activities.
Hicks and Wilburn (2001) evaluated Wal-Mart entrance decision by testing on a contemporaneous and lagged growth variables. Basker (2005) performed a similar analysis of a larger sample of U.S countries. This analysis used an instrumental method to control for the planned entrance date as an instrument. Basker has been criticized for instrument variable choice, (Curls, State, and Viser, 2004), though I believe criticism is misplaced, and have demonstrated in a later study (Hicks,2007) that the resulting estimate are not particularly sensitive to the choice of
Congress must agree on a plan, which could take years, and then the market must be weaned slowly from dependence on the companies and the financial backing they provide. The reasons by now are well understood. Fannie and Freddie, created to increase the availability of mortgage loans, misused the government's support to enrich shareholders and executives by backing millions of shoddy loans. Taxpayers so far have spent more than $135 billion on the cleanup. The much more divisive question is whether the government should preserve the benefits that the companies provide to middle-class borrowers, including lower interest rates, lenient terms and the ability to get a mortgage even when banks are not making other kinds of loans.