Week 2-ACC577-Knowledge Check

Question 1What is the accounting treatment of the direct issue costs of shares of stocks?O Debit to the related share premiuin during organization stage and operating stageDebit to organizational cost during the organization stageDebit to revenue expenditure during the operating stageDebit to accumulated expenses during the operating stageDQuestion 2What is the total number of shares that a corporation may issue under its charter?O Authorized sharesIssued shareso Unissued sharesO Treasury sharesEQuestion 3In case shares are issued for outstanding liabilities, what is the measure of recording share capital and share premium?O Par value of the shares issuedAmount of liabilities set-offFair value of the shares issuedBook value of the shares issued

Question Content Area The charter of a corporation provides for the issuance of 110,854 shares of common stock. Assume that 36,504 shares were originally issued and 3,924 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2-per-share dividend is declared? a. $36,504 b. $65,160 c. $3,924 d. $110,854

Chapte WE th Chapter 2-shareholders' Equity MULTIPLE CHOICE QUESTIONS a MC1 Unlimited liability of the owners Right of succession Limited life a. b. C. Exempt from taxation. MC6 d. MC2 What does the par value of share capital represent? Liquidation value of the share capital. Book value of the share capital. Legal nominal value assigned to the share capital Amount received by the corporation when the share originally issued. a. b. с. d. MC Ownership of shares in the ordinary share capital of corporation entitles the holders to the following rights: MC3 To elect the board of directors of the corporation. To share in the profits of the corporation. To purchase new shares when they are offered for sale. To participate in the daily operations of the corporation. I. II. III. IV. I, II, III and IV II, III and IV I, III and IV I, II, and III a. b. с. d. MC4 The entry to record the issuance of ordinary shares for fully paid subscription is a. a memorandum entry. Ordinary Share Subscribed b.…

Question Content Area The charter of a corporation provides for the issuance of 87,000 shares of common stock. Assume that 44,000 shares were originally issued and 3,200 were subsequently reacquired. What is the amount of cash dividends to be paid if a $3-per-share dividend is declared?

When a corporation issues new ordinary shares, which of the following will increase? I. Total liabilities; II. Total Assets; III. Quick Assets; IV. Net Worth    a. I and II b. III and IV c. II,III, and IV d. I,II, III, and IV

Question Content Area The charter of a corporation provides for the issuance of 101,000 shares of common stock. Assume that 56,000 shares were originally issued and 7,000 were subsequently reacquired. What is the number of shares outstanding? a. 56,000 b. 63,000 c. 7,000 d. 49,000

IFRS 10 Consolidated Financial Statements sets out how to determine whether one entity has control over another entity. Which of the following statements is in accordance with either the IFRS 10 definition of control or with the guidance prescribed to help identify whether control exists over another entity? a. The investor must be represented on the board of directors or governing body of the other entity. b. The investor must have greater than 50 per cent of the voting rights in the other entity. c. The investor must be the only party that receives variable returns from the other entity. d. The investor must have existing rights that give it the current ability to direct relevant activities of the other entity.

Authorized registered capital represents  a. Number of shares that shareholders have subscribed for at the issue of shares b. The maximal number of shares joint stock company which could be soldc c . Registered capital recorded in companies register d. The sum of minimal values of shares that was really paid by sha

Outstanding shares are the  a. Number of shares that have been distributed to shareholders b. Total number of shares that can be issued by the corporation at any time c. Number of shares that are owned by shareholders at the balance sheet date d. Number of shares the corporation has repurchased.

Which of the following statements are correct? 1. A company's authorised share capital must be included in its published statement of financial position as part of shareholders' funds. 2 If a company makes a bonus issue of ordinary shares, the total shareholders interest (share capital plus reserves) remains unchanged 3. A company's statement of changes in equity must include the proceeds of any share issue during the period 4. A company must disclose its significant accounting policies by note to its financial statements A. 3 and 4 only В. 1 and 3 only С. 1 and 2 only D. 2, 3 and 4

Match each of the following stockholders' equity concepts to the appropriate term (a – h).   Question 41 options:   limited liability   public corporation   corporation   dividends   articles of incorporation   private corporation   board of directors   bylaws   1. Document which formally creates a corporation 2. Creditors cannot pursue stockholders' personal assets to satisfy claims 3. The rules and procedures 4. A legal entity, separate from the people who create and operate it 5. A company whose shares can be bought and sold in public markets 6. Group which meets periodically to establish corporate policies 7. A company whose shares are not bought or sold in public markets 8. Corporate income distributed to stockholders

Quèstion 12 Which of the following represents the total number of shares that a corporation may issue under the terms of its charter unissued shares outstanding shares issued shares authorized shares

Ifrs 10 Consolidatd financial statements sets out the requirements for the consolidation of entities under the control of the reporting entity. In which of the follwing scenarios is control deemed to exist according to IFRS10? i) The reporting entity owns 40% of the voting equity in Mafuta Ltd. and has the right to appoint six directors to the board of ten. II) the Reporting entity owns 60% of the voting equity in Maziwa ltd and appoints only four directors to the board of ten. a) both i and ii b) i only  c) ii only  d) neither i or ii

Question 10 The par value per share of common stock represents: a. an arbitrary amount established in the articles of incorporation b. the amount of dividends per share to be received each year c. the minimum selling price of the stock established by the articles of incorporation. d. the minimum amount the stockholder will receive when the corporation is liquidated. A Click Submit to complete this assessment.

Required: 1.Memorandum entry of transactions2.Post to the Shareholder’s equity Accounts3.Prepare the share capital section of the Shareholder’s equity as at Dec.31,2018

Dividends paid to a shareholder by a corporation should be reported on which of the following forms?   a. 1099-MISC   b. None of these   c. 1099-INT   d. 1099-DIV   e. 1099-R

Question 30-32 The following are the balance sheets of Entity A and Entity B as of June 30, 2021: Entity A Current Assets 500 Noncurrent Assets 1,300 Capital Stock - 100 Shares 300 Retained Earnings 800 Current Liabilities 300 Non Current Liabilities 400 Entity B Current Assets 700 Noncurrent Assets 3,000 Capital Stock - 60 shares 600 Retained Earnings 1,400 Current Liabilities 600 Non Current Liabilities 1,100 On July 1, 2021, A acquired all issued shares of B giving in exchange 2.50 A shares for each ordinary shares of B in order for B to obtain public listing. The fair value of each ordinary share of B at July 1, is 40., while the quoted market price of A's ordinary shares is 16. The fair values of A's identifiable net assets at acquisition date are the same of their carrying amounts, except for noncurrent assets whose fair value was 1,500. On the other hand, the fair value of the net assets of B are approximately their carrying amounts. 30. Calculate the goodwill(excess) resulting…

3. Authorized shares represent the a.number of shares that have been sold. b.number of shares that are currently held by shareholders. c.number of shares that have been repurchased by the corporation. d.maximum number of shares that can be issued.

Problem #30 Preparation of the Shareholders' Equity Section of a Statement of Financial Position Preparation of the Shareholders' Equity Section of a Statement of Financial Position Corporation on June 30, 2019. Each account has a normal balance. The accounts listed below were taken from the general ledger of the Liggayu corporation on June 30, 2019. Each account has a normal balance. Ordinary Shares P1,300,000 Share Premium- P 325,000 Preference Subscribed Ordinary Shares Ordinary Shares Dividend 100,000 Share Premium-Treasury 17,500 62,500 Donated Capital Distributable 70,000 Treasury Stock-Ordinary (3,000 shares) Share Premium-Ordinary Retained Earnings: 117,500 2,075,000 Unappropriated Appropriated for Plant Expansion 1,870,000 7% Preference Shares 250,000 125,000 7% Preference Shares- Subscribed 25,000 Additional Information: a. Preference share has a par value of P50 per share. Liggayu was authorized to issue 10,000 shares. The preference share is cumulative and participating. b.…

QUESTION 3 Entity A invested in 3,386,000 shares of a listed company on 1 October 2023 at a cost of $3.68 per share. On 31 December 2023, the shares had a market value of $6.94 per share. Entity A is not planning on selling these shares in the short term and elects to hold them as Fair Value through Other Comprehensive Income. REQUIRED: (1) Measure the amounts of the financial asset recognised in the Statement of Financial Position on 31 December 2023. (2) Measure the amounts recognised in the Statement of Profit or Loss for the financial asset of the year 2023. (3) Measure the amounts of the Fair Value Reserve recognised in the Statement of Financial Position on 31 December 2023. ANSWERS: (1) The answer = $ (2) The answer = $ (3) The answer = $ (If it is a gain of $10, enter 10. If it is a loss of $10, enter -10.)

18 - Which of the following accounts includes securities acquired for long-term purposes and capital shares acquired for the purpose of becoming a partner in another business  ?       a) 12 Trade Receivables Account Group  B) 23 Other Receivables Account Group  NS) 22 Trade Receivables Account Group  D) 13 Other Receivables Account Group  TO) 24 Financial Fixed Assets Account Group

1. The income summary of a corporation is closed to the  •Treasury shares •Share premium •Capital •Retained earnings 2. When shares are issued for services, the measure is equal to  •Fair value of the service already rendered •Par value of the shares issued •Book value of the shares issued •Fair value of the shares issued

Question 33 ACME Incorporated had the following balances for its equity accounts on the company's audited statement of financial position at December 31, 2019: Shareholder's Equity Paid in on capital shares Preferred [8%, cumulative, 30,000 authorized, issued & outstanding $ 300,000 Common [unlimited authorized, 550,000 issued & outstanding] Contributed surplus 865,000 216,250 $ 1,381,250 Retained earnings Accumulated other comprehensive income Total shareholder's equity 432,500 216,250 $ 2,030,000 Information for 2020: Net income was Gain on disposal of bonds Dividends declared and paid on preferred shares Issued 3,000 common shares Foreign translation gain on subsidiary Comprehensive income $ 350,000 135,000 15,000 5,000 87,500 262,500 Required: Prepare ACME's statement of changes in equity at December 31, 2020 in good form.

Watts and Lyon are forming a partnership. Watts invests $40,500 and Lyon invests $49,500. The partners agree that Watts will work one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the business; (c) a salary allowance of $15,000 per year to Lyon and the remaining balance in accordance with the ratio of their initial capital investments; or (d) a salary allowance of $15,000 per year to Lyon, 11% interest on their initial capital investments, and the remaining balance shared equally. The partners expect the business to perform as follows: Year 1, $13,000 net loss; Year 2, $32,500 net income; and Year 3, $54,167 net income. Required: Complete the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the partners under each of…

on Which constitutive document has the power to prohibit or restrict the issuance of shares or bonds for the company ? of Both Articles and Memorandum tion Memorandum of Association Articles of Associatir Agreement between shareholders 3: 104°F Sunny O G 1) ENG 7/ DELL

1. The issuer of an ordinary share dividend to ordinary shareholders should transfer from retained earnings to contributed capital an amount equal to the a. fair value of the shares issued. b. par or stated value of the shares issued. c. book value of the shares issued. d. minimum legal requirements.   2. Statement 1: Treasury shares are a company’s own shares that have been reacquired and retired.         Statement 2: The cost method records all transactions in treasury shares at their cost and reports the treasury shares as a deduction from ordinary shares. a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect.   3. The declaration and issuance of a share dividend a. increases ordinary shares outstanding and increases total equity. b. increases retained earnings and increases total equity. c. decreases retained earnings but does not change total equity. d. may increase share premium but does not change total…