Answer:
Transaction Assets Liabilities Stockholders' Equity
Issue common stock Increase NE Increase
Issue preferred stock Increase NE Increase Purchase treasury stock Decrease NE Decrease
Sale of treasury stock Increase NE Increase Declare cash dividend NE Increase NE
Pay cash dividend Decrease Decrease NE
100% stock dividend NE NE NE
2-for-1 stock split NE NE NE
When shares are sold or issued, they increase the stockholders equity as people buy these shares. They also increase assets because cash comes into the company when the shares are sold. This is why the Issuing of preference and common stock as well as the sale of Treasury shares had the same effects.
When cash dividends are declared, they become a liability that is owed to equity holders.
When these dividends are then paid, they remove the liability but reduce assets as cash is used to pay the dividends.
100% stock dividend reduces retained earnings but increases equity so stockholders equity does not change.
Answer:
Trading on equity defines the increase in profit earned by the equity shareholders due to presense to financial charges.
When a company is higher the rate of interest on borrowed funds.so company should option for trading on equity.
Explanation:
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The overall capitalization rate by direct market extraction assuming each property is equally comparable to the subject is 11.4%
Explanation:
Capitalization is the accounting of expenditures and the regular distribution of investments in fixed reserves over future years. Capitalisation, in other words, includes an expense usually documented in a temporary account and reported as an income account on a permanent basis.
Take the average of the three property capitalization rates to find the overall capitalization rate.
Answer:
Journal Entry
Dr. Contingent Consideration Liability $500,000
Cr. Goodwill $500,000
Explanation:
It is assumed that the decline in the fair value is the correction of the acquisition entry. It means due to this event the consideration liability and goodwill are overstated we need to rectify the balances.
Hence,
The contingent consideration liability will be debited to reduce the liability and goodwill will also be decreased by crediting the goodwill account.
The unrecoverable sales tax on business entertaining ($250) has been deducted from $3,500
solution
SALES TAX CONTROL ACCOUNT
Payable s $ 3250 Receivables $4000
Balance c/d (owned to tax authority) $ 750
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$ 4000 $4000
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By balance b/d $ 750
