Company Research Assignment III

Discuss the propriety of showing:(a) Treasury stock as an asset.(b) “Gain” or “loss” on sale of treasury stock as additionsto or deductions from income.(c) Dividends received on treasury stock as income.

Which of the following is true of a stock dividend?A. It is a liability.B. The decision to issue a stock dividend resides with shareholders.C. It does not affect total equity but transfers amounts between equity components.D. It creates a cash reserve for shareholders.

1. Treasury stock is presented on the balance sheet as an asset. a liability. a reduction to equity. a memorandum in the notes.   2.  Under the cost method, when the corporation reacquires its capital stock, it assumes it will reissue rather than retire the stock. debits Treasury Stock for the price paid. credits Cash for the price paid. does all of these choices

When stock is purchased with cash and held in treasury,what is the impact on the balance sheet equation?a. No change—the reduction of the asset Cash is offsetwith the addition of the asset Treasury Stock.b. Assets decrease and stockholders’ equityincreases.c. Assets increase and stockholders’ equitydecreases.d. Assets decrease and stockholders’ equitydecreases.

a. Where should a declared but unpaid cash dividend be reported on the balance sheet?b. Where should a declared but unissued stock dividend be reported on the balance sheet?

Explain thoroughly why it is the answer.

1. What is the accounting for treasury share transactions? a. On repurchase or re-issuance of previously purchased own shares, no gain or loss is recognized. b. Treasury shares are accounted for as financial assets. c. On re-issuance of treasury shares, a gain or loss is recognized equal to the difference between the previous repurchase price and the re-issuance price. d. On repurchase of treasury shares, a gain or loss is recognized equal to the difference between the amount at which the shares were issued and the repurchase price for the shares. . 2.  If a no-par value share is issued... a. The value of each share is automatically ₱5. b. The corporation is automatically in violation of its state charter. c. There is no legal capital. d. The entire proceeds is considered as legal capital. . 3 Which of the following statements relating to bonds is incorrect? a. None of the choices b. A bond’s face value is the amount the issuer must pay…

. If common stock is issued for an amount greater than par value, the excess should be credited to Cash. Retained Earnings. Paid-in Capital in Excess of Par. Legal Capital

1. What is the accounting for treasury share transactions?    a. Treasury shares are accounted for as financial assets. b. On repurchase or re-issuance of previously purchased own shares, no gain or loss is recognized. c. On re-issuance of treasury shares, a gain or loss is recognized equal to the difference between the previous repurchase price and the re-issuance price. d. On repurchase of treasury shares, a gain or loss is recognized equal to the difference between the amount at which the shares were issued and the repurchase price for the shares.

Which of the following statements is CORRECT?  A. Net working capital is defined as current assets minus the difference between current liabilities and notes payable, and any increase in the current ratio automatically indicates that net working capital has increased B. If a company follows a policy of "matching maturities," this means that it matches its use of common stock with its use of long-term debt as opposed to short-term debt. C. Net working capital is defined as current assets minus the difference between current liabilities and notes payable, and any decrease in the current ratio automatically indicates that net working capital has decreased. D. Credit policy has an impact on working capital because it influences both sales and the time before receivables are collected.

If a company repurchases its own stock, the journal entry to record this transaction will cause 'Total Stockholders' Equity to increase on the Balance Sheet. True False

When a company buys shares of its own stock to be held in treasury, it records a reduction in: B . both assets and shareholders’ equity.

Which of the following statements best describes the effect of treasury stock transactions on assets and stockholders' equity? O The purchase of treasury stock increases total assets and increases total stockholders' equity. O The sale of treasury stock increases total assets and may decrease both paid-in-capital and retained earnings. O The purchase of treasury stock decreases assets and decreases both retained earnings and total stockholders' equity. O The sale of treasury stock increases total assets and may increase or decrease total stockholders' equity.

For the following three situations: A company uses its paid-in capital (in addition to retained earnings) to pay dividends. A company distributes another company’s shares as dividends. A company distributes its own shares as dividends. What types of dividends are involved, respectively? Enter 1, 2, 3, or 4 that represents the correct answer.   1. property dividends, stock dividends, liquidating dividends, respectively. 2. property dividends, liquidating dividends, stock dividends, respectively. 3. liquidating dividends, property dividends, stock dividends, respectively. 4. liquidating dividends, stock dividends, property dividends, respectively.

5. Which one of the following statements is NOT true relating to dividends? 1. Dividends are a portion of the profit of a company divided amongst the shareholders. 2. Dividends need not be declared solely from the profit of the current year and can include profits from previous trading periods, included in retained income. 3. Dividends can only be declared if approved by the shareholders through their voting rights. 4. Dividends need only be paid out in cash and cannot be in the form of capitalization shares.

2. The change in retained earnings is affected by which of the following? (a) Payment of dividends and common stock. (b) Net income and payment of dividends. (c) Net income and paid-in capital. (d) Net income and common stock.