The following shareholders' equity accounts are reported by Branch Inc on January 1Common shares (unlimited authorized, 150,000 issued)$2.400.000Preferred shares ($4 cumulative, convertible, 100,000 authorized, 5,000 issued)375,000Contributed surplus-reacquisition of common shares30.000Retained earnings1.275.000The following selected transactions occurred during the year:Feb.11 Issued 50,000 common shares at $20 per share.Mar.2.Reacquired 20,000 common shares at $22 per share.Split the common shares 2 for 1 when the common shares were trading at $30 per share.June14July25Reacquired 500 preferred shares at $70 per share.Sept.16Reacquired 50,000 common shares for $17 per share.Declared a 5% common stock dividend distributable on December. 13 to shareholders of record on November 24.The fair value of the common shares on October 27 was $19 per share.Oct27Distributed the stock dividend declared on October 27. The fair value of the common shares on December 13 was$21 per share.Dec. 13Why is the Contributed Surplus account reported in shareholders'equity?

Contributed capital represents the excess capital remained by issuing the shares at the price above…

The following shareholders' equity accounts are reported by Branch Inc on January 1: Common shares (unlimited authorized, 150.000 issued) $2.400.000 Preferred shares ($4 cumulative, convertible, 100.000 authorized, 5,000 issued) 375,000 Contributed surplus-reacquisition of common shares 30,000 Retained earnings 1.275.000

The following shareholders' equity accounts are reported by Branch Inc on January 1: Common shares (unlimited authorized, 150.000 issued) $2.400.000 Preferred shares ($4 cumulative, convertible, 100.000 authorized, 5,000 issued) 375,000 Contributed surplus-reacquisition of common shares 30,000 Retained earnings 1.275.000

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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