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