INTERMEDIATE ACCOUNTING <CUSTOM LL>
10th Edition
ISBN: 9781260887068
Author: SPICELAND
Publisher: MCG CUSTOM
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Chapter 18, Problem 18.15BE
Stock split
• LO18–8
Refer to the situation described in BE 18–13, but assume a 2-for-1 stock split instead of the 5% stock dividend. Prepare the
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At what payout percentage is a stock dividend typically considered a stock split, in accordance with the recommendation of the Financial Accounting Standards Board?
a. 15%
b. 33%
c. 25%
d. 10%
What effect does the issuance of a 2-for-1 stock split have on each of the following?
Par Value per
Retained Earnings
Share
Decrease
Decrease
No effect
No effect
Increase
No effect
Decrease
No effect
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Chapter 18 Solutions
INTERMEDIATE ACCOUNTING <CUSTOM LL>
Ch. 18 - Identify and briefly describe the two primary...Ch. 18 - Prob. 18.2QCh. 18 - Prob. 18.3QCh. 18 - Prob. 18.4QCh. 18 - Prob. 18.5QCh. 18 - Prob. 18.6QCh. 18 - Prob. 18.7QCh. 18 - What is meant by a shareholders preemptive right?Ch. 18 - Terminology varies in the way companies...Ch. 18 - Most preferred shares are cumulative. Explain what...
Ch. 18 - The par value of shares historically indicated the...Ch. 18 - Prob. 18.12QCh. 18 - How do we report components of comprehensive...Ch. 18 - The balance sheet reports the balances of...Ch. 18 - At times, companies issue their shares for...Ch. 18 - Prob. 18.16QCh. 18 - The costs of legal, promotional, and accounting...Ch. 18 - When a corporation acquires its own shares, those...Ch. 18 - Discuss the conceptual basis for accounting for a...Ch. 18 - The prescribed accounting treatment for stock...Ch. 18 - Brandon Components declares a 2-for-1 stock split....Ch. 18 - What is a reverse stock split? What would be the...Ch. 18 - Suppose you own 80 shares of Facebook common stock...Ch. 18 - Prob. 18.24QCh. 18 - Comprehensive income LO181 Schaeffer Corporation...Ch. 18 - Stock issued LO184 Penne Pharmaceuticals sold 8...Ch. 18 - Prob. 18.3BECh. 18 - Prob. 18.4BECh. 18 - Prob. 18.5BECh. 18 - Retirement of shares LO185 Agee Storage issued 35...Ch. 18 - Treasury stock LO185 The Jennings Group...Ch. 18 - Prob. 18.8BECh. 18 - Prob. 18.9BECh. 18 - Property dividend LO187 Adams Moving and Storage,...Ch. 18 - Stock dividend LO188 On June 13, the board of...Ch. 18 - Prob. 18.14BECh. 18 - Stock split LO188 Refer to the situation...Ch. 18 - Prob. 18.16BECh. 18 - Prob. 18.2ECh. 18 - Earnings or OCI? LO182 Indicate by letter whether...Ch. 18 - Stock issued for cash; Wright Medical Group LO184...Ch. 18 - Issuance of shares; noncash consideration LO184...Ch. 18 - Prob. 18.6ECh. 18 - Share issue costs; issuance LO184 ICOT Industries...Ch. 18 - Prob. 18.14ECh. 18 - Prob. 18.16ECh. 18 - Prob. 18.20ECh. 18 - Prob. 18.22ECh. 18 - Prob. 18.25ECh. 18 - Various stock transactions; correction of journal...Ch. 18 - Prob. 18.1DMPCh. 18 - Prob. 18.6DMPCh. 18 - Prob. 18.8DMP
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- ol ! 1 Current Attempt in Progress On October 31, the stockholders' equity section of Cullumber Company consists of common stock $370,000 and retained earnings $904,000. Cullumber is considering the following two courses of action: (1) declaring a 6% stock dividend on the 37,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $16 per share. Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share. After After Stock Stock Before Action Dividend Split Stockholders' equity Paid-in capital Q A Common stock In excess of par NO 2 N Total paid-in capital Retained earnings Total stockholders' equity Outstanding shares 30 W S #3 X H 1 option command E D $ Ad 4 $ $ 288 FA R C do L % 5 F T V MacBook Air F6 < 6 G Y B & 7 H 90 U W 00 8 N DI J ( 1 9 DE K M D O MOSISO L F H D Р W 1 . ( command 1 ?arrow_forwardRequired: 5. The average per-share sales price of the common stock when issue $? per share 6. The cost of the treasury stock per share $? per share 7. The total stockholders' equity $? 8. The per-share book value of the common stock assuming that there are no dividends in arrears and that the preferred stock can be redeemed at its par value $? per sharearrow_forwardPlease solve for only d)arrow_forward
- What is a reverse stock split? What would be the effect of a reverse stock split on one million $1 par shares? On the accounting records?arrow_forwardi need a solution vr.9arrow_forwardWhich of the following is not true about a 2 for 1 stock split? total dollar value of stockholder's equity is unchanged the market value of a share of stockwill double the parvalue of a share of stockwillbecutinhalf the number of shares outstanding will doublearrow_forward
- 1. If the dividends paid on a preferred stock issue are $2.2 per share and the cost of preferred s Assume there are no flotation costs. Price of a preferred stock is a perpetuity if the answer is $10.52 Enter 10.52arrow_forwardPlz solve!!arrow_forwardWhich of the following methods should be used to account for the conversion of preferred stock to common stock? Book Value Market Value I. Yes No II. Yes Yes III. No Yes IV. No No III IV I IIarrow_forward
- True or False, pls explain why 3) A 3 for 1 stock split will result to same number of shares as a 200% stock dividend True Falsearrow_forwardHow does a 2: 1 stock split (stock-split-up) affect the following two items? Par Value per Share Retained Earnings Select one: to. Increase Has no effect b. Decrease Decrease c. Decrease Has no effect d. Has no effect Has no effectarrow_forwardLO 1 7.4 Dividend Growth Model Under what two assumptions can we use the dividend growth model presented in the chapter to determine the value of a share of stock? Comment on the reasonableness of these assumptions. LO 1 7.5 Common versus Preferred Stock Suppose a company has a preferred stock issue ondarrow_forward
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