Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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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
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Chapter 18 Solutions
Intermediate Accounting
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 - Cash dividend LO188 Real World Financials...Ch. 18 - Effect of preferred stock on dividends LO187 The...Ch. 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 - Comprehensive income LO182 The following is from...Ch. 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 - Reporting preferred shares LO184, LO187 Ozark...Ch. 18 - Prob. 18.9ECh. 18 - Prob. 18.10ECh. 18 - Retirement of shares LO185 In 2018, Borland...Ch. 18 - Treasury stock LO185 In 2018, Western Transport...Ch. 18 - Treasury stock; weighted-average and FIFO cost ...Ch. 18 - Prob. 18.14ECh. 18 - Prob. 18.15ECh. 18 - Prob. 18.16ECh. 18 - Transact ions affecting retained earnings LO186,...Ch. 18 - Effect of cumulative, nonparticipating preferred...Ch. 18 - Stock dividend LO188 The shareholders equity of...Ch. 18 - Prob. 18.20ECh. 18 - Cash in lieu of fractional share rights LO188...Ch. 18 - Prob. 18.22ECh. 18 - Transact ions affecting retained earnings LO186...Ch. 18 - Profitability ratio LO181 Comparative balance...Ch. 18 - Prob. 18.25ECh. 18 - Various stock transactions; correction of journal...Ch. 18 - Share buybackcomparison of retirement and treasury...Ch. 18 - Reacquired sharescomparison of retired shares and...Ch. 18 - Prob. 18.4PCh. 18 - Shareholders equity transactions; statement of...Ch. 18 - Prob. 18.6PCh. 18 - Prob. 18.7PCh. 18 - Prob. 18.8PCh. 18 - Effect o f preferred stock characteristics on...Ch. 18 - Prob. 18.10PCh. 18 - Stock dividends received on investments;...Ch. 18 - Various shareholders equity topics; comprehensive ...Ch. 18 - Prob. 18.13PCh. 18 - Prob. 18.1BYPCh. 18 - Prob. 18.2BYPCh. 18 - Research Case 184 FASB codification; comprehensive...Ch. 18 - Judgment Case 185 Treasury stock; stock split;...Ch. 18 - Prob. 18.6BYPCh. 18 - Prob. 18.7BYPCh. 18 - Prob. 18.8BYPCh. 18 - Prob. 1CCTC
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- Help Save &Exit Which of the following does not represent potential shares for an EPS calculation? 18 Multiple Choice Ints 02:0t26 Participating preferred stock. Convertible bonds. Stock rights. Convertible preferred stock. Nextarrow_forwardPlease dont give image based answers thnkuarrow_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_forward
- PLEASE PROVIDE COMPUTATION!arrow_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_forward1. 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_forward
- q7- Which of the following statements is true? Select one: a. Trailing P/E is based on the current share price and forward P/E is based on next year's forecast share price. b. Trailing P/E is based on last year's share price and forward P/E is based on the current share price. c. Both trailing and forward P/E are based on the current share price. d. Trailing P/E is based on last year's share price and forward P/E is based on next year's forecast share price. Clear my choicearrow_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
- QUESTION 10 Diluted earnings per share shows dilution resulting from additional shares that may be issued for stock options or bonds that may be converted to shares of common stock in the future. True Falsearrow_forwardStock split versus stock dividend-Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has the stockholders' equity position shown. The current stock price is $120 per share. The most recent period's earnings available for common stock is included in retained earnings. a. What effect on Mammoth's equity account would result from the stock split? b. What change in stock price would you expect to result from the stock split? Preferred stock Common stock (100,000 shares at $4 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity $ 1,000,000 400,000 1,700,000 10,000,000 $13,100,000 c. What is the maximum cash dividend per share that the firm could pay on common stock before and after the stock split? (Assume that legal capital includes all paid-in capital.) d. Contrast your answers to parts a through c. with the circumstances surrounding a 50% stock dividend. a. If the firm declares a 3-for-2 stock split, the new balance in the common…arrow_forwardThe 2:1 split of shares (stock split-up): a. increases par value per share without affecting total equity. b. decreases par value per share and increases total equity. c. decreases par value per share without affecting total equity.arrow_forward
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