Treasury stock : The shares which were reacquired or bought back by the company, but not formally retired from the corporation stock, are called as treasury stock. The re-acquisition of issued shares, decreases the number of outstanding shares. To journalize : The transactions occurred on July 9, September 22, and November 23

Question

Sweet Solutions reports net income of $375,000, sales of $6,250,000, and average assets of $850,000. What is the profit margin?

Answer 1

Question

Chapter 12, Problem 12.14EX

(a)

To determine

Treasury stock: The shares which were reacquired or bought back by the company, but not formally retired from the corporation stock, are called as treasury stock. The re-acquisition of issued shares, decreases the number of outstanding shares.

To journalize: The transactions occurred on July 9, September 22, and November 23

(b)

To determine

Paid-in capital: This is the total of stock capital contributed by investors, and so, sometimes referred to as contributed capital. It includes preferred stock capital issued, common stock capital issued, and capital issued by the way of sale of treasury stock.

To determine: The balance in Paid-in Capital from Sale of Treasury Stock due to treasury stock transactions

(c)

To determine

To discuss: The reason, for which Incorporation M has purchased the treasury stock

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Sweet Solutions reports net income of $375,000, sales of $6,250,000, and average assets of $850,000. What is the profit margin?

Kimberly resides in Jamaica and applied the following rules to losses carried forward in her business. Which rule was incorrectly applied? A.The deduction allowed for prior year losses (PYL) is 50 percent of the net income for the respective year. B.Prior year losses which are not utilized in the current year cannot be applied against net income of subsequent years C.Net income is the total income less all exemptions and allowable deductions excluding the specific losses. D.There is no cap on the number of years for which losses may be carried forward.

Please explain the solution to this financial accounting problem with accurate explanations.

Answer 2

Question

Chapter 12, Problem 12.14EX

(a)

To determine

Treasury stock: The shares which were reacquired or bought back by the company, but not formally retired from the corporation stock, are called as treasury stock. The re-acquisition of issued shares, decreases the number of outstanding shares.

To journalize: The transactions occurred on July 9, September 22, and November 23

(b)

To determine

Paid-in capital: This is the total of stock capital contributed by investors, and so, sometimes referred to as contributed capital. It includes preferred stock capital issued, common stock capital issued, and capital issued by the way of sale of treasury stock.

To determine: The balance in Paid-in Capital from Sale of Treasury Stock due to treasury stock transactions

(c)

To determine

To discuss: The reason, for which Incorporation M has purchased the treasury stock

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Answer 3

Question

Chapter 12, Problem 12.14EX

(a)

To determine

Treasury stock: The shares which were reacquired or bought back by the company, but not formally retired from the corporation stock, are called as treasury stock. The re-acquisition of issued shares, decreases the number of outstanding shares.

To journalize: The transactions occurred on July 9, September 22, and November 23

(b)

To determine

Paid-in capital: This is the total of stock capital contributed by investors, and so, sometimes referred to as contributed capital. It includes preferred stock capital issued, common stock capital issued, and capital issued by the way of sale of treasury stock.

To determine: The balance in Paid-in Capital from Sale of Treasury Stock due to treasury stock transactions

(c)

To determine

To discuss: The reason, for which Incorporation M has purchased the treasury stock

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Answer 4

Question

Chapter 12, Problem 12.14EX

(a)

To determine

Treasury stock: The shares which were reacquired or bought back by the company, but not formally retired from the corporation stock, are called as treasury stock. The re-acquisition of issued shares, decreases the number of outstanding shares.

To journalize: The transactions occurred on July 9, September 22, and November 23

(b)

To determine

Paid-in capital: This is the total of stock capital contributed by investors, and so, sometimes referred to as contributed capital. It includes preferred stock capital issued, common stock capital issued, and capital issued by the way of sale of treasury stock.

To determine: The balance in Paid-in Capital from Sale of Treasury Stock due to treasury stock transactions

(c)

To determine

To discuss: The reason, for which Incorporation M has purchased the treasury stock

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Answer 5

Chapter 12, Problem 12.14EX

(a)

To determine

Treasury stock: The shares which were reacquired or bought back by the company, but not formally retired from the corporation stock, are called as treasury stock. The re-acquisition of issued shares, decreases the number of outstanding shares.

To journalize: The transactions occurred on July 9, September 22, and November 23

(b)

To determine

Paid-in capital: This is the total of stock capital contributed by investors, and so, sometimes referred to as contributed capital. It includes preferred stock capital issued, common stock capital issued, and capital issued by the way of sale of treasury stock.

To determine: The balance in Paid-in Capital from Sale of Treasury Stock due to treasury stock transactions

(c)

To determine

To discuss: The reason, for which Incorporation M has purchased the treasury stock

Answer 6

Chapter 12, Problem 12.14EX

(a)

To determine

Treasury stock: The shares which were reacquired or bought back by the company, but not formally retired from the corporation stock, are called as treasury stock. The re-acquisition of issued shares, decreases the number of outstanding shares.

To journalize: The transactions occurred on July 9, September 22, and November 23

Answer 7

Chapter 12, Problem 12.14EX

(a)

To determine

Treasury stock: The shares which were reacquired or bought back by the company, but not formally retired from the corporation stock, are called as treasury stock. The re-acquisition of issued shares, decreases the number of outstanding shares.

To journalize: The transactions occurred on July 9, September 22, and November 23

Answer 8

(b)

To determine

Paid-in capital: This is the total of stock capital contributed by investors, and so, sometimes referred to as contributed capital. It includes preferred stock capital issued, common stock capital issued, and capital issued by the way of sale of treasury stock.

To determine: The balance in Paid-in Capital from Sale of Treasury Stock due to treasury stock transactions

Answer 9

(b)

To determine

Paid-in capital: This is the total of stock capital contributed by investors, and so, sometimes referred to as contributed capital. It includes preferred stock capital issued, common stock capital issued, and capital issued by the way of sale of treasury stock.

To determine: The balance in Paid-in Capital from Sale of Treasury Stock due to treasury stock transactions

Answer 10

(c)

To determine

To discuss: The reason, for which Incorporation M has purchased the treasury stock

Answer 11

(c)

To determine

To discuss: The reason, for which Incorporation M has purchased the treasury stock

Answer 12

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Answer 13

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Answer 23

Ch. 12 - Of two corporations organized at approximately the...Ch. 12 - A stockbroker advises a client to buy preferred...Ch. 12 - A corporation with both preferred stock and common...Ch. 12 - An owner of 2,500 shares of Simmons Company common...Ch. 12 - Prob. 5DQ Ch. 12 - Prob. 6DQ Ch. 12 - A corporation reacquires 60,000 shares of its own...Ch. 12 - The treasury stock in Discussion Question 7 is...Ch. 12 - Prob. 9DQ Ch. 12 - Prob. 10DQ

Solution Summary: The author explains that treasury stock is a stockholders' equity account, since the issued shares are bought back, and decreases the number of outstanding shares.

Concept explainers

To discuss: The reason, for which Incorporation M has purchased the treasury stock

Chapter 12 Solutions