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Home / Questions / Report equity transactions on the statement of cash flows 1) Proceeds from the issuance

Report equity transactions on the statement of cash flows 1) Proceeds from the issuance

 Report equity transactions on the statement of cash flows

1) Proceeds from the issuance of shares appear in which, if any, section of the cash flow statement?

A) operating activities section

B) investing activities section

C) financing activities section

D) Proceeds from the issuance of shares do not appear in the cash flow statement.

2) The issuance of common shares in exchange for land and equipment will:

A) affect the financing activities section of a cash flow statement

B) affect the operating activities section of a cash flow statement

C) not affect a cash flow statement

D) affect the investing activities section of a cash flow statement

3) The issuance of repurchased shares at a price below its cost will:

A) affect the financing activities section of a cash flow statement

B) affect the operating activities section of a cash flow statement

C) not affect the cash flow statement

D) affect the investing activities section of a cash flow statement

4) Stock dividends distributed appear in which, if any, section of the cash flow statement?

A) financing and investing activities section

B) operating and investing activities section

C) operating activities section only

D) The distribution of a stock dividend does not appear anywhere in the cash flow statement.

5) The payment of a stock dividend would appear as a cash outflow in the financing activities section on a cash flow statement.

6) On a "real world" balance sheet, all additional contributed capital typically appears as a single amount labeled "Contributed Surplus."

7) The repurchase of shares would appear as a cash outflow in the financing activities section on a cash flow statement.

8) The following equity transactions may affect the cash flow statement. For each transaction given, indicate the appropriate section of the cash flow statement where the transaction would appear and whether it would be a cash inflow (+) or a cash outflow (-). If a transaction doesn't appear on a cash flow statement, place an (X) in the "No Effect" column.

a. Issuance of common shares

b. Issuance of preferred shares

c. Repurchase of common shares at above issue price

d. 2-for-1 stock split

e. Payment of cash dividends

f. Issuance of repurchased common shares at an amount above cost

Transaction

Operating Activities

Investing Activities

Financing Activities

No Effect

a.

 

 

 

 

b.

 

 

 

 

c.

 

 

 

 

d.

 

 

 

 

e.

 

 

 

 

f.

 

 

 

 

 

9) Scar Corporation obtained a charter from the province of Nova Scotia authorizing 500,000 common shares and 20,000 preferred shares.

Listed below are selected accounts from the general ledger of the Scar Corporation. Assuming all accounts have normal balances, prepare the shareholders' equity section of the balance sheet for the Scar Corporation as of December 31, 2010.

Common shares$ 50,000

Cash 40,000

Preferred shares 100,000

Accounts receivable 35,000

Land50,000

Equipment75,000

Retained earnings45,000

10) Listed below are selected accounts from the general ledger of the JetNew Corporation. Assuming all accounts have normal balances, prepare the shareholders' equity section of the balance sheet for the JetNew Corporation as of December 31, 2010.

Common shares$ 50,000

Cash 40,000

Preferred shares 100,000

Accounts receivable 35,000

Contributed surplus-repurchase of common

shares15,000

Land50,000

Equipment75,000

Retained earnings45,000

Accumulated other comprehensive income50,000

How would this format differ typically in the real world?

11) Cough FX Limited reports the following shareholders' equity as of December 31, 2010:

Preferred shares, $5.00, authorized 100,000 shares,

issued 80,000 shares$4,400,000

Common shares, authorized 200,000 shares,

issued 150,000 shares, 146,000 outstanding2,190,000

Retained earnings 3,400,000$9,990,000

Determine the following:

a.What was the average issue price per common share?

b.What was the average issue price per preferred share?

c.Assume the board of directors declares dividends totaling $1,850,000 to the shareholders. The               preferred shares are cumulative, and no dividends were declared last year. Calculate the amount per               share each class of shares will receive.

d.Assume the board of directors authorizes a 2-for-1 split on the common shares. Calculate the number of shares outstanding after the split and the book value of Both classes of shares.

e.Assume the board of directors authorizes a 15% stock dividend on the common shares after the stock               split

Dec 09 2019 View more View Less

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