Cpa/Cma Accounting

Acc 22

1. (b) With the selling of stock at $25 per share, the APIC has a balance of $15. When the stock is repurchased at $20, common stock would be debited for $10 and APIC would be debited for $10 and therefore APIC decreases by $10 per share.

2. (c) Treasury stock account is created when a company buys back its own stocks. Therefore, when the stock is repurchased in 2010, Treasury stock Is debited for $100,000. The issuance of treasury stock in 2011, would be recorded as a $50,000 credit to the Treasury stock and a $30,000 credit to additional paid in capital. By the end of 2011, the treasury stock would have a debit balance of $50,000.

3. (b) A transfer on non-monetary asset is recorded at its fair market value, and the gain or loss is realized on the disposition of the asset. In this example, a gain of $.50 per share is recorded, in which the total gain is recoded for $50,000 (.50 100,000)

4. (a) a stock dividend divides the pie (the corporation) into more pieces, but the pie is still the same size. Hence, a corporation will have a lower EPS and a lower book value per share following a stock dividend.

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6. (b) A stock split is not recorded since it only increases the number of stocks outstanding and the par value is reduced to half. The dividend that would be reported would be the 12/15 cash dividend: (200,000 x $.50).

CMA

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3. (b) A stock dividend is a transfer of equity from retained earnings to paid-in capital. Additional shares are outstanding following the stock dividend, but every shareholder maintains the same percentage of ownership. In effect, a stock dividend divides the pie into more pieces, but the pie is still the same size. Hence, a corporation will have a lower EPS and a lower book value per share following a stock dividend, but e