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Chapter 15: Question 1IFRS (page 825)
Where can authoritative IFRS guidance related to stockholders’ equity be found?
Authoritative IFRS guidance are IAS 1, IAS 32, and IAS 39
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(Preferred Dividends) The outstanding capital stock of Edna Millay Corporation consists of 2,000 shares of \(100 par value, 8% preferred, and 5,000 shares of \)50 par value common.
Instructions
Assuming that the company has retained earnings of $90,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions.
Under IFRS, the amount of capital received in excess of par value would be credited to:
(a) Retained Earnings.
(b) Contributed Capital.
(c) Share Premium.
(d) Par value is not used under IFRS
(Recording the Issuance of Common and Preferred Stock) Kathleen Battle Corporation was organized on January 1, 2017. It is authorized to issue 10,000 shares of 8%, \(100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of \)1 per share. The following stock transactions were completed during the first year.
Jan. 10 Issued 80,000 shares of common stock for cash at \(5 per share.
Mar. 1 Issued 5,000 shares of preferred stock for cash at \)108 per share.
Apr. 1 Issued 24,000 shares of common stock for land. The asking price of
the land was \(90,000; the fair value of the land was \)80,000.
May 1 Issued 80,000 shares of common stock for cash at \(7 per share.
Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of
their bill of \)50,000 for services rendered in helping the company
organize.
Sept. 1 Issued 10,000 shares of common stock for cash at \(9 per share.
Nov. 1 Issued 1,000 shares of preferred stock for cash at \)112 per share.
Instructions
Prepare the journal entries to record the above transactions.
(Cash Dividend and Liquidating Dividend) Lotoya Davis Corporation has 10 million shares of common stock issued and outstanding. On June 1, the board of directors voted an 80 cents per share cash dividend to stockholders of record as of June 14, payable June 3
Instructions
Distinguish between common and preferred stock
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