會計學原理Financial Accounting by Robert Libby第八版 第十一章 答案

Chapter11-ReportingandInterpretingOwners’Equity

Chapter11

ReportingandInterpretingOwners’Equity

ANSWERSTOQUESTIONS

1.Acorporationisaseparatelegalentity(authorizedbylawtooperateasanindividual).Itisownedbyanumberofpersonsand/orentitieswhoseownershipisevidencedbysharesofcapitalstock.Itsprimaryadvantagesare:(a)transferabilityofownership,(b)limitedliabilitytotheowners,and(c)theabilitytoaccumulatelargeamountsofresources.

2.Thecharterofacorporationisalegaldocumentfromthestatethatauthorizesitscreationasaseparatelegalentity.Thecharterspecifiesthenameoftheentity,itspurpose,andthekindsandnumberofsharesofcapitalstockitcanissue.

3.(a)Authorizedcapitalstock—themaximumnumberofsharesofstockthatcanbe

soldandissuedasspecifiedinthecharterofthecorporation.

(b)Issuedcapitalstock—thetotalnumberofsharesofcapitalstockthathavebeenissuedbythecorporationataparticulardate.

(c)Outstandingcapitalstock—thenumberofsharescurrentlyownedbythestockholders.

4.Commonstock—theusualornormalstockofthecorporation.Itisthevotingstockandgenerallyranksafterthepreferredstockfordividendsandassetsdistributedupondissolution.Oftenitiscalledtheresidualequity.Commonstockmaybeeitherparvalueorno-parvalue.

Preferredstock—whenoneormoreadditionalclassesofstockareissued,theadditionalclassesarecalledpreferredstock.Preferredstockhasmodificationsthatmakeitdifferentfromcommonstock.Generally,preferredstockhasbothfavorableandunfavorablefeaturesincomparisonwithcommonstock.Preferredstockusuallyisparvaluestockandusuallyspecifiesadividendratesuchas―6%preferredstock.‖

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Chapter11-ReportingandInterpretingOwners’Equity

5.Parvalueisanominalpershareamountestablishedforthecommonstockand/orpreferredstockinthecharterofthecorporation,andisprintedonthefaceofeachstockcertificate.Thestockthatissoldbyacorporationtoinvestorsaboveparvalueissaidtohavesoldatapremium,whilestockthatissoldbelowparissaidtohavesoldatadiscount.Thelawsofpracticallyallstatesforbidtheinitialsaleofstockbyacorporationtoinvestorsbelowparvalue.No-parvaluestockdoesnothaveanamountpersharespecifiedinthecharter.Asaconsequence,itmaybeissuedatanypricewithoutinvolvingadiscountorapremium.Itavoidsgivingtheimpressionofavaluethatisnotpresent.

6.Theusualcharacteristicsofpreferredstockare:(1)dividendpreferences,(2)conversionprivileges,(3)assetpreferences,and(4)nonvotingspecifications.

7.Thetwobasicsourcesofstockholders’equityare:

Contributedcapital—theamountinvestedbystockholdersbypurchasefromthecorporationofsharesofstock.Itiscomprisedoftwoseparateelements:(1)theparorstatedamountderivedfromthesaleofcapitalstock(commonorpreferred)and(2)theamountreceivedinexcessofparorstatedvalue.

Retainedearnings—theaccumulatedamountofallnetincomesincetheorganizationofthecorporation,lesslossesandlesstheaccumulatedamountofdividendspaidbythecorporationsinceorganization.

8.Stockholders’equityisaccountedforintermsofsource.Thismeansthatseveralaccountsaremaintainedforthevarioussourcesofstockholders’equity,suchascommonstock,preferredstock,contributedcapitalinexcessofpar,andretainedearnings.

9.Treasurystockisacorporation’sowncapitalstockthatwassold(issued)andsubsequentlyreacquiredbythecorporation.Corporationsfrequentlypurchasesharesoftheirowncapitalstockforsoundbusinessreasons,suchastoobtainsharesneededforemployees’bonusplans,toinfluencethemarketpriceofthestock,toincreaseearningspershareamounts,andtohavesharesonhandforuseintheacquisitionofothercompanies.Treasurystock,whileheldbytheissuingcorporation,confersnovoting,dividend,orotherstockholderrights.

10.Treasurystockisreportedonthebalancesheetunderstockholders’equityasadeduction;thatis,ascontrastockholders’equity.Any―gainorloss‖ontreasurystockthathasbeensoldisreportedonthefinancialstatementsasanadditiontocontributedcapitalifagain;ifaloss,itisdeductedfromanypreviouscontributedcapital,orotherwisefromretainedearnings.

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Chapter11-ReportingandInterpretingOwners’Equity

11.Thetwobasicrequirementstosupportacashdividendare:(1)cashonhandortheabilitytoobtaincashsufficienttopaythedividendand(2)asufficientbalanceinretainedearnings,becausethedividendrepresentsareturnofearningstothestockholders.Acashdividendreducesboththeassetsofacorporationandstockholders’equitybytheamountofthedividend.

12.Cumulativepreferredstockhasadividendpreferencesuchthat,shouldthedividendsonthepreferredstockforanyyear,orseriesofyears,notbepaid,dividendscannotbepaidtothecommonstockholdersuntilallsuchdividendsinarrearsarepaidtothepreferredstockholders.Noncumulativepreferredstockdoesnothavethispreference;therefore,dividendsnotpaidinpastperiodswillneverbepaidtothepreferredstockholders.

13.Astockdividendinvolvestheissuancetothestockholdersofadividendinthecorporation’sownstock(ratherthancash).Astockdividendissignificantlydifferentfromacashdividendinthatthecorporationdoesnotdisburseanyassets,whileinthecaseofacashdividend,cashisdecreasedbytheamountofthedividend.Acashdividendalsoreducestotalstockholders’equitybytheamountofthedividend.Incontrast,astockdividenddoesnotchangetotalstockholders’equity.

14.Theprimarypurposesforissuingastockdividendare:(1)tomaintaindividendconsistency;thatis,topaydividendseachyeareitherincashorincapitalstock,and(2)tocapitalizeretainedearnings;thatis,astockdividendrequiresatransferfromtheRetainedEarningsaccounttothepermanentcontributedcapitalaccountsfortheamountofthedividend.Althoughthistransferdoesnotchangestockholders’equityintotal,itdoescauseashiftfromretainedearningstocontributedcapital.

15.Whenadividendisdeclaredandpaid,thethreeimportantdatesare:

Declarationdate—thedateonwhichtheboardofdirectorsvotesthedividend.Inthecaseofacashdividend,adividendliabilitycomesintoexistenceonthisdateandmustberecordedasadebittoRetainedEarningsandasacredittoDividendsPayable.

Dateofrecord—thisdateusuallyisaboutonemonthafterthedateofdeclaration.Itisthedateonwhichthecorporationextractsfromitsstockholders’recordsthelistofindividualsowningshares.Thedividendispaidonlytothosenameslistedontherecorddate.Noentryintheaccountsismadeonthisdate.

Dateofpayment—thedateonwhichthecashisdisbursedtopaythedividend.Itfollowsthedateofrecordasspecifiedinthedividendannouncement.TheentrytorecordthecashdisbursementforthedividendisadebittoDividendsPayableandacredittoCash.

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Chapter11-ReportingandInterpretingOwners’Equity

16.Retainedearningsistheaccumulatedamountofallnetincomeofthecorporationlessalllossesandlesstheaccumulatedamountofalldividendsdeclaredtodate.Theprimarycomponentsofretainedearningsare:beginningbalance,plusnetincome,lessnetlosses,minusdividendsdeclared,equalstheendingbalance.

ANSWERSTOMULTIPLECHOICE

1.c)

6.b)

2.d)

7.c)

3.b)

8.c)

4.a)

9.d)

5.c)

10.a)

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Chapter11-ReportingandInterpretingOwners’Equity

Authors’RecommendedSolutionTime

(Timeinminutes)

AlternateCasesand

Miniexercises

No.Time

15

25

35

45

55

65

75

85

95

105

ExercisesProblemsProblemsProjectsNo.TimeNo.TimeNo.TimeNo.Time

1151451451302152452302303303453303204304604354205205305206206306307457307*815845

930920

10151020

11201130

12201245

1320

1430

1530

1630

1720

1830

1920

2015

2115

2220

2320

2415

2515

*Duetothenatureofthisproject,itisverydifficulttoestimatetheamountoftimestudentswillneedtocompletetheassignment.Aswithanyopen-endedproject,itispossibleforstudentstodevotealargeamountoftimetotheseassignments.Whilestudentsoftenbenefitfromtheextraeffort,wefindthatsomebecomefrustratedbytheperceiveddifficultyofthetask.Youcanreducestudentfrustrationandanxietybymakingyourexpectationsclear.Forexample,whenourgoalistosharpenresearchskills,wedevoteclasstimetodiscussingresearchstrategies.Whenwewantthestudentstofocusonarealaccountingissue,weoffersuggestionsaboutpossiblecompaniesorindustries.

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Chapter11-ReportingandInterpretingOwners’Equity

MINI-EXERCISES

M11–1.

Stockholdersmay:

a)Voteinthestockholders’meeting(orbyproxy)onmajorissuesconcerningmanagementofthecorporation.

b)Participateproportionatelywithotherstockholdersinthedistributionofthecorporation’sprofits.

c)Shareproportionatelywithotherstockholdersinthedistributionofcorporateassetsuponliquidation.

Beingabletovoteisthemostimportantoftherightsbecausethisensuresthattheownershaveaninputatthestockholders’meetingandsomecontrolofthemanagementofthecorporation,thusenablingthemtoprotecttheirrightsasstockholders.

M11–2.

Unissuedshares=90,000(268,000–178,000)

M11–3.

Cash(170,000$21)(+A)...........................................3,570,000

CommonStock(170,000$1)(+SE)......................

CapitalinExcessofPar(+SE).................................

Thejournalentrywouldbedifferentiftheparvaluewere$2:

Cash(170,000$21)(+A)...........................................3,570,000

CommonStock(170,000$2)(+SE)......................

CapitalinExcessofPar(+SE).................................

170,000

3,400,000

340,000

3,230,000

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Chapter11-ReportingandInterpretingOwners’Equity

M11–4.

Commonstockisthebasicvotingstockissuedbyacorporation.Itranksafterpreferredstockfordividendsandassetsdistributeduponliquidationofthecorporation.Thedividendrateforcommonstockisdeterminedbytheboardofdirectors,andisbasedonthecompany’sprofitability.Thedividendrateforpreferredstockisfixedbyacontract.Commonstockhasmorepotentialforgrowththanpreferredstockifthecompanyisprofitable.Ontheotherhand,theinvestormaylosemoremoneywithcommonstockthanwithpreferredstockifthecompanyisnotprofitable.

Usually,Itisadvisabletoinvestinthecommonstockifyoubelievethecompanywillbeprofitable.Commonstockwillreceiveahigherreturnonthe$100,000thanpreferredstockwould.

M11–5.

Assets

Liabilities

Stockholders’

NetIncome

Equity

Purchased

20,000shares

Decreaseby

$900,000

Nochange

Decreaseby

$900,000

Nochange

oftreasury

stock

Sold5,000

shares

Sold10,000

shares

Increaseby

$250,000

Increaseby

$370,000

Nochange

Nochange

Increaseby

$250,000

Increaseby

$370,000

Nochange

Nochange

M11–6.

200,000X$0.65=$130,000

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Chapter11-ReportingandInterpretingOwners’EquityM11–7.

April15:

RetainedEarnings(-SE)..............................................

65,000

DividendsPayable(+L)............................................

June14:

65,000

DividendsPayable(-L).................................................

65,000

Cash(-A)..................................................................

M11–8.

65,000

PastYear

CurrentYear

TotaltoPreferredStockholders

200,000shares$2

200,000shares$2

=

=

$400,000

$400,000

$800,000

M11–9.

StockDividend

Nochangeinassets

Nochangeinliabilities

Increaseincommonstock

StockSplit

Nochangeinassets

Nochangeinliabilities

Nochangeincommonstock

Nochangeinstockholders’equity:Nochangeinstockholders’equitydecreaseretainedearningsand

increasecontributedcapitalbythesame

amount.

Decreasesmarketvalue

M11–10.

Decreaseinmarketvalue

RetainedEarnings(-SE)..............................................

800,000

CommonStock(+SE)..............................................

800,000

11-8

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Chapter11-ReportingandInterpretingOwners’EquityEXERCISES

E11–1.

ComputationofEndofYearBalanceforTreasuryStock:

Beginningbalance

Netincrease

Endingbalance

307,532,841

75,874,824

383,407,665

ComputationofSharesOutstanding:

Issuedshares

Treasurystock

SharesOutstanding

2,109,316,331

(383,407,665)

1,725,908,666

E11–2.

Req.1Thenumberofauthorizedsharesisspecifiedinthecorporatecharter:300,000.Req.2Issuedsharesarethesharessoldtothepublic:160,000

Req.3Issuedshares160,000

Treasurystock(25,000)

Outstandingshares135,000

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Chapter11-ReportingandInterpretingOwners’Equity

E11–3.

Req.1

Stockholders’Equity

Contributedcapital:

Preferredstock,authorized4,000shares,

issuedandoutstanding,3,000shares......................................................$24,000

Commonstock,authorized103,000shares,

issuedandoutstanding,20,000shares....................................................200,000

Capitalinexcessofpar,preferred..............................................................36,000

Capitalinexcessofstatedvalue,no-parcommon.....................................120,000

Totalcontributedcapital..........................................................................380,000

Retainedearnings..........................................................................................60,000

TotalStockholders’Equity.......................................................................$440,000

Req.2

Theanswerwoulddependontheprofitabilityofthecompanyandthestabilityofitsearnings.Thepreferredstockhasa9%dividendrate.Ifthecompanyearnsmorethan9%,theadditionalearningswouldaccruetothecurrentstockholders.Ifthecompanyearnslessthan9%,itwouldpayahigherratetothepreferredstockholders.

E11–4.

Req.1($30x90,000shares)-$1,600,000=$1,100,000

Req.2$900,000-$1,000,000+$800,000=$700,000

Req.390,000shares–80,000shares=10,000sharesReq.4EPS=$1,000,00080,000=$12.50

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Chapter11-ReportingandInterpretingOwners’Equity

E11–5.

Req.1

a.Cash(5,600sharesx$20)(+A)............................................112,000

Commonstock(5,600sharesx$10)(+SE)......................

Capitalinexcessofpar,commonstock(+SE)..................

Soldcommonstockatapremium.

56,000

56,000

b.Cash(1,000sharesx$25)(+A)............................................

25,000

Commonstock(1,000sharesx$10)(+SE)......................

Capitalinexcessofpar,commonstock(+SE)..................

Soldcommonstockatapremium.

Req.2

Stockholders’Equity

Contributedcapital:

Commonstock,par$10,authorized11,500shares,

10,000

15,000

outstanding6,600shares....................................................................$66,000

Contributedcapitalinexcessofpar........................................................71,000

Totalcontributedcapital..........................................................................137,000

Retainedearnings......................................................................................12,000

Stockholders’equity...................................................................................$149,000

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Chapter11-ReportingandInterpretingOwners’Equity

E11–6.

Req.1

Commonstock,classAatparvalue:118,529,925X$0.01=$1,185(thousand)

Req.2

(NotethatthissolutionisbasedonthenumberofClassAcommonsharesthatareoutstanding.WeelectnottoincludetheClassBsharesbecausetheyareownedbytheDillardfamily.Usually,studentsdonotquestionthisassumptionbutwhentheydo,itpermitsustodiscussreasonsforissuingdifferenttypesofcommonstock.Inthiscase,ownersofClassBsharesarepermittedtoelecttwo-thirdsoftheboardofdirectors,effectivelylettingthefoundingfamilymaintaincontrolofapubliccompany).

Numberofsharesoutstanding2012:118,529,925sharesissuedminus73,099,319sharesheldastreasurystock=45,430,606.

Numberofsharesoutstanding2011:117,706,523sharesissuedminus61,740,439sharesheldastreasurystock=55,966,084.

Req.3

(Inthousands)Retainedearningsfor2011:$3,107,344minusnetincomefor2012$463,909plusdividendsfor2012$10,002=$2,653,437

Req.4

Asof2012,treasurystockhaddecreasedcorporateresourcesby$1,846,312(thousand).

Req.5

Treasurystocktransactionsdecreasedstockholders’equity490,786by$(thousand)($1,846,312-$1,355,526).

Req.6

For2012,treasurystockcostpershare:$1,846,312(thousand)÷73,099,319shares=$25.26.

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Chapter11-ReportingandInterpretingOwners’Equity

E11–7.

Req.1

a.Cash(50,000sharesx$50)(+A)..........................................2,500,000

Commonstock(50,000sharesx$2)(+SE)......................100,000

Capitalinexcessofpar,commonstock(+SE)..................2,400,000

Soldcommonstockatapremium.

b.Treasurystock(2,000sharesx$52)(+XSE,-SE)................

104,000

Cash(-A)...........................................................................

Boughttreasurystock.

Req.2

Stockholders’Equity

Contributedcapital:

Commonstock,par$2,authorized80,000shares,

104,000

issued50,000shares..........................................................................$100,000

Contributedcapitalinexcessofpar........................................................2,400,000

Totalcontributedcapital..........................................................................2,500,000

Treasurystock............................................................................................(104,000)

Stockholders’equity...................................................................................$2,396,000

E11–8.

Shareholders’equity(deficit)inthousands:

Commonstock,parvalue$.01pershare;100,000,000sharesauthorized,33,981,509sharesissuedandoutstandingatDecember31,2010,34,150,389sharesissuedandoutstandingatDecember31,2011

Additionalpaid-incapital

Accumulateddeficit

Totalshareholders’equity

20102011

340342

198,304200,524

(118,282)(98,733)

80,362102,133

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11-13

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Chapter11-ReportingandInterpretingOwners’Equity

E11–9.

Stockholders’Equity

Contributedcapital:

Preferredstock,8%,par$50,authorized59,000shares,

issuedandoutstanding,20,000shares...............................................$1,000,000

Commonstock,par$10,authorized98,000shares,

issued,78,000shares.........................................................................780,000

Capitalinexcessofpar,preferredstock.................................................600,000

Capitalinexcessofpar,commonstock..................................................780,000

Treasurystock.....................................................................................(80,000)

Retainedearnings*.........................................................................................160,000

Totalstockholders’equity........................................................................$3,240,000

*($210,000–$50,000=$160,000.)

E11–10.

Req.1

a.Cash(20,000sharesx$20)(+A)..........................................400,000

Commonstock,no-par(+SE)............................................

.

b.Cash(6,000sharesx$40)(+A)............................................240,000

Commonstock,no-par(+SE)...........................................

c.Cash(7,000sharesx$30)(+A)............................................210,000

Preferredstock(7,000sharesx$10)(+SE)......................

Capitalinexcessofpar,preferred(+SE)..........................

400,000

240,000

70,000

140,000

Req.2

Yes,itisethicalaslongasthereisafulldisclosureofrelevantinformation.Inanyarm’slengthtransaction,aninformedbuyerwillpaythemarketvalueofthestock.

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Chapter11-ReportingandInterpretingOwners’Equity

E11–11.

Req.1

Numberofpreferredsharesissued:$100,000$10=10,000

Req.2

Numberofpreferredsharesoutstanding:10,000sharesissuedminus500sharesheldastreasurystock=9,500.

Req.3

Averagesalespricepershareofpreferredstockwhenissued:($100,000+$15,000)÷10,000shares=$11.50.

Req.4

Decreasedcorporateresourcesby$9,500-$1,500=$8,000.

Req.5

Treasurystocktransactionsdecreasedstockholders’equityby$8,000(sameasthedecreaseincorporateresourcesin4above).

Req.6

Treasurystockcostpershare:$9,500÷500shares=$19.00.

Req.7

Totalstockholders’equity:$741,000.

Req.8

Issuepriceofcommonstock$600,000÷8,000shares=$75.00.

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Chapter11-ReportingandInterpretingOwners’Equity

E11–12.

Req.1

Thenumberofsharesthathavebeenissuediscomputedbydividingthecommonstockaccount($4,008million)bytheparvalueoftheshares($1pershare)orapproximately4,008,000,000shares.

Req.2

Retainedearningsendof2011............$70,682,000,000

Netincomefor2012............................10,756,000,000

Dividendsfor2012...............................(5,811,600,000)

Retainedearningsendof2012............$75,626,400,000

Theamountofretainedearningsisanestimatebecausewedonotknowtheexactnumberofsharesoutstanding(becausewedonotknowthenumberofsharesintreasurystock).Thisnumberisneededtodeterminetheamountofdividendspaidduring2012.Webasedthedividendsontheestimatecalculatedintheprevio