1)
Introduction:
Classes of shares:
• Shares provide partial ownership or a “share” of a corporation. There are two primary classes of shares – Equity Shares and Preference Shares.
• Equity shares are the class of shares which carry voting rights and equity share holders are the true owners of the company as in the event of dissolution, equity shareholders get last preference in clearing the amounts invested and there is no guarantee of profits will be debited by dividend on an annual basis.
• Preference shares are the class of shares which do not carry voting rights and in the event of dissolution, preference shareholders get first preference in clearing the amounts invested and there is usually guarantee of profits will be debited by dividend on an annual basis.Convertible Preference shares are preference shares that carry the option to be converted into equity shares after certain duration.
Journal Entries
- Journal entries are the first step in recording financial transactions and preparation of financial statements.
- These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.
- Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.
To Prepare:
Record of transactions in
2)
Introduction:
Statement of
• An essential element of the
• When shares are issued, the par value is recorded in the Paid in capital account and if shares are issued at a price greater than the par value, they are said to be issued at a premium. This premium on issue is recorded in the Excess of Paid in Capital over Par value account.
• Retained earnings are the balance of net income for the period after deduction of operating and revenue expenses.
To Prepare:
Statement of Stockholders equity
Want to see the full answer?
Check out a sample textbook solution
Chapter 13 Solutions
MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Accounting, The Financial Chapters (My Accounting Lab)
- The company where Daniel works produces skateboards locally but sells them globally for $60 each. Daniel is one of the production managers in a meeting to discuss preliminary results from the year just ended. Here is the information they had in front of them: Standard Quantity per Unit Standard Price Wood 2.50 feet $4.00 per foot Wheels 5.00 wheels $0.50 per wheel Direct labor 0.30 hours $14.00 per hour Actual results: . • Quantity of wood purchased, 225,000 feet; quantity of wood used, 220,000 feet. Quantity of wheels purchased, 418,800 wheels; quantity of wheels used, 400,800 wheels. Actual cost of the wood, $4.20 per foot. Actual cost of the wheels, $0.55 per wheel. • Quantity of DL hours used, 26,400 hours; actual cost of DL hours, $15.20 per hour. Actual units produced, 80,000 skateboards. (a) Complete a variance analysis for DM (both wood and wheels) and DL, determining the price and efficiency variances for each; be sure to specify the amount and sign of each variance. DM- Wood…arrow_forwardNeed help with this financial accounting questionarrow_forwardPlease provide answer this financial accounting questionarrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education