Exam 3 acct
Cash Flows: Decrease in Liabilities
Decrease in cash flow (subtract
Cash Flows: Increase in assets
Decrease in cash flows
Cash Flows: Increase in Liabilities
Increase in Cash flows
Cash Flows: Decrease in assets
Increase in cash flows
Adjustment for accrued interest
Interest Expense: Increase Interest Payable:Increase (Face value x % x months/12)
Interest Payment
Interst Expense Increase Cash Decrease
paid-in capital
The amount stockholders paid in to the corporation in exchange for shares of ownership.
investing activities
changes in long term assets and investments
financing activities
changes in longterm liabilities and stock holders equity
Lindy Corporation has 1,000,000 authorized shares of $20 par value common stock. As of June 30, 2024, there are 600,000 shares issued and outstanding. On June 30, 2024, the Board of Directors declared a $0.30 per share cash dividend to be paid on August 1, 2024, to stockholders of record on July 15, 2024. Dividend Declaration adjustment
(600,000 outstanding shares x .30 per share dividend) Cash Dividend: Increase 180,000 Divident Payable: Increase 180,000
Lindy Corporation has 1,000,000 authorized shares of $20 par value common stock. As of June 30, 2024, there are 600,000 shares issued and outstanding. On June 30, 2024, the Board of Directors declared a $0.30 per share cash dividend to be paid on August 1, 2024, to stockholders of record on July 15, 2024. Payment Date
600,000 outstanding shares x .30 per share dividend) Dividend payment: Increase 180,000 Cash: Decrease 180,000
Issueance of bond with premium (Grand Company issued $600,000, 10%, 20-year bonds on January 1, 2024, at 104) How much cash is recieved from bond when sold?
600000 x 1.04= 624,000
Total Stock holders equity
Add everything - treasury stock
Purchased 500 shares of treasury common stock for $24 per share.
Cash: Decrrease 12,000 (shares x cash per share) Tresury stock: Increase 12,000
Issuance of bond
Cash: Increase Bonds Payable Increase
Issueance of bonds are sold at discount (ex: The bonds are sold at 95)
Cash: Increase (total after discount applied) Bonds Payable Increase (face value of bond) Discount on Bonds Payable: Increase (discount amount)
Issued 8,000 shares of common stock with a par value of $10 for $110,000 cash.
Cash: Increase 110,000 Common stock: Increase 80,000 (shares x par value) APIC- Common stock: Increase 30,000 (cash adjustments- common stock adjustments)
Adjustment Issued 4,000 shares of $100 par preferred stock for $107 cash.
Cash: Increase 428,000 (shares x cash value) Preffered Stock: Increase 400,000 (shares x par value) APIC-Preferred stock: Increase 28,000 (Cash adjustment-Preferred stock adjustment)
Issueance of bond with premium adjustment (Grand Company issued $600,000, 10%, 20-year bonds on January 1, 2024, at 104)
Cash: increase Bonds payable: Increase Premium on Bonds Payable: Increase
The number of shares of common stock outstanding
Common stock shares-treasury stock shares
Number of COMMON STOCK issued
Common stock value total/ par value
Companies frequently issue both preferred stock and common stock. What are the major differences in the rights of stockholders between these two classes of stock?
Common stockholders have the right to vote on corporate actions while preferred stockholders generally do not have voting rights. However, preferred stockholders will receive dividends and assets prior to common stockholders. Preferred stockholders may also have a cumulative dividend feature that increases the amount of dividends paid to the preferred stockholders.
Long term liablity
Mortgage payable, bonds payable, premium on bonds payable, note payable (over a year)
Cash flows: Increase in Account RECIEVABLE
Negative cash flow (substract)
Current liiabilities
Note payable (within year), salary payable, tax payable, unearned revenue, interest payable, account payable
Issuance of note
Note payable: Increase Cash: Increase
Repay note at maturity
Notes payable: Decrease Interest payable: Decrease Interest expense:Increase Cash:Decrease
Assume the preferred stock is not cumulative. Calculate the amount of dividends that will be allocated to the preferred stockholders and to the common stockholders.
Preffered stock dividend: preferred stock cash value x % preffered stock = 32,000 Common stock dividend: Declared cash dividend- 32,000
Assume the preferred stock is cumulative. Calculate the amount of dividends that will be allocated to the preferred stockholders and to the common stockholders. 3 years of dividends in arears
Preffered stock dividend: preferred stock cash value x % preffered stock x 4 years (cummulative, 3 years in arrearas) = 128,000 Common stock dividend: Declared Cash dividend-128,000 (preferred stock dividend)
Amount of EARNED CAPITAL
RETAINED EARNINGS VALUE
Amoutn of CONTRIBUTED CAPITAL
Total common stock value + additiional paid in exess of par- treasuery stock value
Why would a corporation earn treasury stock?
a) To reissue the shares to officers and employees under bonus and stock compensation plans b) To increase trading of the company's stock in the hopes of enhancing its market value c) To have additional shares available for use in the acquisition of other companies d) To reduce the number of shares outstanding and thereby, increase reported Earnings Per Share.
Declared and paid a $10,000 cash dividend
financing activity
Issued $20 million in bonds for cash
financing activity
Issued common stock for $10,000 cash
financing activity
operating activities
income statement items
Paid $80 million to purchase a building
investing activity
Sold equipment for $5,000 cash
investing activity
Acquired $30,000 land by issuing bonds
non cash activity
Collected a $15,000 Accounts Receivable
operating activity
Paid a $20,000 Accounts Payable
operating activity
Received $25,000 cash for services provided to a customer
operating activity
Retained earnings
the amount of net income retained in the corporation