My CPA-FARmodule15 Test
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| A. when more stock is issued existing shareholders have preemptive privalage to keep the same % of voting rightsB. debit treasury stock at par value
- excess > par value debit PIC- CS up to original issue price
- excess > original issue price debit to RE
- acquire > par < original price debit PIC-CS to paid amount, PIC-TS to original price
- resale same as issuancC. 1. when the FV of all classes of securities is not determinable
2. known FV security is allocated only FV amount, rest is allocated to other security and excess to additional paid in capital of the securityD. Net income available to common stockholders/ weighted-avg number of common shares outstanding
- Numerator calculated by taking Net income - dividend declared on noncumulative preferred stock- dividends accumulated on cumulative preferred stockE. 1. unpaid dividends from prior years owed to preferred stockholders
2. calculate amount owed preferred stockholders (% given x total par value) for each year unpaid and subtract by dividends paid
3. as a disclosureF. readjust each year.
Increase
Debit- Compensation expense
Credit- Liability under SAR plan
Deduction
Reverse above
When redeemed in CS
Replace liability with Stock rights outstandingG. restricts RE to show that assets in the amount of the appropriation are not available for dividends
Debit- RE
Credit- Reserve for RE
Reverse when reserve no longer neededH. Market value for the stock - ParI. bonus plan designed to invest in employeers equity securities. sometimes ESOP borrows $ to acquire stock, can be garunteed by employer. debt to liability reduces shareholders equity. amt employer contribute/commit employer puts in compensation expenseJ. Yes as a liability b/c its an instrument that may force entity to transfer assets/issue equity sharesK. 1. average market price > exercise price
2. average market price <= exercise price
3. EPS would stay the same or increase L. 1. the relative FV of stock and warrants
2. use FV of known amount and remaining is allocated to the remaining security (usually resulting in additional paid in capital allocated to that security)M. preferred claims, fully secured creditors, partially secured creditors, unsecured creditors, stockholders equityN. 1. time sensitive so multiply by % of year was around
2. net result is the same as if not convertedO. 1. Dividends paid out in an asset other than cash
2. at FV of transferred asset. Gain or loss is recognized based on difference of BV of transferred assetP. 1. shows companys ability to sustain losses
2. total debt, all liabilities/ stockholders equityQ. take preferred % amount and multiply by total par value for common and preferred stocks outstanding. this gives the amount for only preferred. Subtract it from total dividend, allocate remaining based on proportion of total par values for preferred/commonR. 1. No
2. Debit- RE: FV of stocks (< 25% increase in stocks) or RE: par of stocks (> 25% increase in stocks)
Credit- Stock dividend distributable: Par of stocks, PIC-excess of par
3. Debit- Stock dividend distributable
Credit- Common stockS. 1. stockholders have option of exchanging preferred stock for common stock at a specified ratio
2. entity has option to repurchase stock at a specified priceT. 1. each reporting period. Final measurement is on settlement date
2. FV of liability incurred
3. straight line over requisite service period |
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Bsantoro
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