I used to do tons of practice problems from my accounting textbooks because they had solutions provided to see if you got it correct. However, I can't find solutions for this edition! Can anyone help me? I want to study and understand this material, but I have no way to practice and see if I'm doing it right. Here is the link as many people are asking for it. Hi MightyElmo, do you mind sending me the link too? I have such a hard time in my accounting class.
The questions in the 14th edition are just about the same as the 15th. I can't say for the newest updated 15th edition. Torrent sites have the solutions manual as well as instructors manuals which is also very helpful , test banks which my intermediate I professor used for making her tests this has a shit ton of questions so don't try and remember questions , excel templates, and another exercise B solution set. These are all very helpful.
On wiley's website you can also find under student resources study guides for each chapter, which is essentially chapter outlines, and pp slides for each chapter. Intermediate is all about practice, so I would highly recommenced the extra two books, along with the solutions manual for the textbook, and the test banks.
The test banks are a good place to start since there's like questions per chapter. Depending on available data, the valuation may be based on market transactions involving comparable assets or the use of discounted expected future cash flows. Companies should avoid the use of the book, par, or stated values as a basis of valuation for these transactions.
The direct costs of issuing shares, such as underwriting costs, accounting and legal fees, printing costs, and taxes, should be reported as a reduction of the amounts paid in. Issue costs are therefore debited to Share Premium because they are unrelated to corporate operations. The major reasons for purchasing its own shares are: If treasury shares are carried in the accounts at cost, these socalled gains or losses arise when the treasury shares are sold. Since treasury shares cannot be considered an asset, dividends on treasury shares are not properly included in net income.
Nonparticipating means the security holder is entitled to no more than the specified fixed dividend. If the security is partially participating, it means that in addition to the specified fixed dividend the security may participate with the ordinary shares in dividends up to a certain stated rate or amount.
A fully participating security shares pro rata with the ordinary shares dividends declared without limitation. In this case, Kim Inc. Cumulative means dividends not paid in any year must be made up in a later year before any profits can be distributed to ordinary shareholders. Any dividends not paid on cumulative preference shares constitute a dividend in arrears. A dividend in arrears is not a liability until the board of directors declares a dividend.
Any excess over par value is reported as share premium-preference. Sources of equity include 1 share capital, 2 share premium, 3 retained earnings, 4 accumulated other comprehensive income, and reduced by 5 treasury shares. Treasury Shares is a contra equity account and Cash is an asset. Thus, this transaction has: The answers are summarized in the table below: The dividend policy of a company is influenced by 1 the availability of cash, 2 the stability of earnings, 3 current earnings, 4 prospective earnings, 5 the existence or absence of contractual restrictions on working capital or retained earnings, and 6 a retained earnings balance.
In declaring a dividend, the board of directors must consider the condition of the corporation such that a dividend is 1 legally permissible and 2 economically sound. In general, directors should give consideration to the following factors in determining the legality of a dividend declaration: In addition, in some jurisdictions, share premium may be used for dividends, although such dividends may be limited to preference shares. Generally, deficits in retained earnings and debits in contributed paid-in capital accounts must be restored before payment of any dividends.
In order that dividends be economically sound, the board of directors should consider: In addition, the ability to expand or replace existing facilities should be considered. Cash dividends are paid out of cash. A balance must exist in retained earnings to permit a legal distribution of profits, but having a balance in retained earnings does not ensure the ability to pay a dividend if the cash situation does not permit it.
A cash dividend is a distribution in cash while a property dividend is a distribution in assets other than cash. Any dividend not based on retained earnings is a liquidating dividend. A share dividend is the issuance of additional shares in a nonreciprocal exchange involving existing shareholders with no change in the par or stated value.
No formal journal entries are required for a share split, but a notation in the ledger accounts would be appropriate to show that the par value of the shares has changed. From an accounting viewpoint, it should be disclosed as a share split effected in the form of a dividend because it meets the accounting definition of a share split as explained above.
An ordinary share dividend involves capitalizing charging retained earnings equal to the fair value of the shares distributed. A share split effected in the form of a dividend involves charging retained earnings for the par stated value of the additional shares issued. Another distinction between a share dividend and a share split is that a share dividend usually involves distributing additional shares of the same class with the same par or stated value.
A share split usually involves distributing additional shares of the same class but with a proportionate reduction in par or stated value. The aggregate par or stated value would then be the same before and after the share split. A share dividend affects only equity accounts; that is, retained earnings is decreased and share capital and share premium are increased. Thus, there is no debt to be paid, and, consequently, there is no severance of corporate assets when a share dividend is issued.
Finally, the corporation usually will formally announce its intent to issue a specific number of additional shares, and these shares must be reserved for this purpose.
A partially liquidating dividend will be debited both to Retained Earnings and Share Premium. The portion of dividends that is a return of capital should be debited to Share Premium. A property dividend is a nonreciprocal transfer of nonmonetary assets between an enterprise and its owners.
A transfer of a nonmonetary asset to a shareholder or to another entity in a nonreciprocal transfer should be recorded at the fair value of the asset transferred, and a gain or loss should be recognized on the disposition of the asset.
Retained earnings are restricted because of legal or contractual restrictions, or the necessity to protect the working capital position.
Restrictions of retained earnings are best disclosed in a note to the financial statements. This allows a more complete explanation of the restriction. No, Mary should not make that conclusion. GAAP requires these losses to be reported as other comprehensive income. GAAP for transactions related to equity pertain to 1 issuance of shares, 2 purchase of treasury shares, 3 declaration and payment of dividends, 4 , the costs associated with issuing shares reduce the proceeds from the issuance and reduce contributed paid-in capital, and 5 the accounting for par, no par and no par shares with a stated value.
GAAP a company has the option of charging the excess of the cost of treasury stock over par value to 1 retained earnings, 2 allocate the difference between paid in capital and retained earnings, or 3 charge the entire amount to paid-in capital. Under IFRS, the excess may have to be charged to paid-in capital, depending on the original transaction related to the issuance of the stock. Revaluation surplus arises under IFRS because of increases or decreases in property, plant and equipment, mineral resources, and intangible assets.
This account is part of general reserves under IFRS and is not considered contributed capital. In addition the options of how to present other comprehensive income under U. GAAP will change in any converged standard in this area. Ordinary Share Dividend Distributable July 1 1 Sept. For example, the Jan. However, this is not a relevant measure of this economic event.
Rather, it is a measure of a prior, unrelated event. The appraised value of the land is a reasonable alternative if based on appropriate fair value estimation techniques. However, it is an appraisal as opposed to a market-determined price. The trading price of the shares is probably the best measure of fair value in this transaction. Balance allocated to ordinary shares Amount allocated to bonds Amount allocated to ordinary shares This question is presented to stimulate some thought and class discussion.
Allocated to Preference Shares: The cumulative dividend is disclosed in a note to the equity section; it is not reported as a liability. This amount is obtained from either of the following: Cost of treasury shares 34,, shares In this case, it is necessary to capitalize par value with a share dividend because the number of shares is increased and the par value remains the same.
Earnings are capitalized for purely procedural reasons. Total cash dividends paid Total value of share dividends Current balance of retained earnings W, W60, 40, , W, The accumulated other comprehensive income is shown as part of equity; the gains on treasury share transactions are recorded as share premium. Treasury shares 2, ordinary shares Preference shares Ordinary shares Share premium: This may be shown as follows: These returns are based on net income related to total assets, where the ending amount of total assets is considered representative.
If the rate of return on total assets uses net income before interest but after taxes in the numerator, the rates of return on total assets are the same as shown below: To explain why the difference in rate of return on assets and rate of return on ordinary share equity occurs, the following schedule might be provided to the student.
The excess earned on the borrowed assets represents additional income for the shareholders and has resulted in the higher income per share. Due to the debt financing, Ingalls has fewer shares outstanding.
The assets obtained from incurrence of this debt are earning a higher return than their cost to Ingalls Company. Some analysts use after-tax interest expense to compute the bond rate. Another way to compute the participating amount is as follows: Liquidating premium to preference This problem involves such concepts as shares sold for cash, noncash stock transactions, and declaration and distribution of share dividends. The student is required to prepare the respective journal entries and the equity section of the statement of financial position to reflect these transactions.
Problem Time 25—35 minutes Purpose—to provide the student with an opportunity to record the acquisition of treasury shares and its sale at three different prices.
In addition, an equity section of the statement of financial position must be prepared. Problem Time 25—30 minutes Purpose—to provide the student with an opportunity to record seven different transactions involving share issuances, reacquisitions, and dividend payments.
Throughout the problem the student needs to keep track of the shares outstanding. This problem involves such concepts as a lump-sum sale of capital shares and a non-cash stock exchange.
The student is required to prepare the journal entries to reflect these transactions. The student is required to record these treasury share transactions under the cost method, assuming the FIFO method for purchase and sale purposes. This problem involves such concepts as the reacquisition, and reissuance of shares; plus a declaration and payment of a cash dividend.
Problem Time 15—20 minutes Purpose—to provide the student with an understanding of the proper accounting for the declaration and payment of cash dividends on both preference and ordinary shares.
Hence with the substitution of given values as per the relevance in the above formula we get the dividend payout ratio and return on common stock equity ratio as,.
Treasury stock do not result any gain or loss from the sale of stock irrespective of sale above or below cost of stock this is due to the reason that the treasury stock do not come under the asset class.
However it is an un-issued equity. More over the gains or losses from the repurchase and reissue of the shares should not be recorded as those transactions are linked with its own share holders; thus the gain or loss from such transactions should not be recorded as income.
Intermediate Accounting 15th Edition Edit editions. Paid-in Capital in excess of par-common stock W. Hence with the substitution of given values as per the relevance in the above formula we get the dividend payout ratio and return on common stock equity ratio as, Principles: View a full sample.
Simple 15–20 E Stock issued for land. Simple 10–15 E Lump-sum sale of stock with bonds. Moderate 20–25 E Lump-sum sales of stock with preferred stock. Simple 10–15 E Stock issuances and repurchase. Moderate 25–30 E Effect of treasury stock transactions on financials. Moderate 15–20 E Preferred stock entries and .
Accounting being the process of preparing financial statements prepares them as per the accounting principles and analyzes the prepared financial statements on the basis of ratios. Accounting principles are the general rule which states the preparation of accounting and financial statements.
McConomy Intermediate Accounting = $ Share Subscriptions Receivable Bal shares Solutions Manual Chapter 15 Copyright © John Wiley & Sons Canada. Ltd. $ 5. Common shares = $2 par value X Debit to Retained Earnings: ($15 X /5(3). Chapter 15 - Leases The lease is a capital lease to Seminole because the present value of the minimum lease payments ($ million) is greater than 90% of the fair value of the asset (90% x $ million = $ million). Since the additional lessor conditions also are met, it is a capital lease to Lukawitz%(9).
Copyright © John Wiley & Sons, Inc. Kieso Intermediate: IFRS Edition, Solutions Manual Questions Chapter 15 (Continued) 9. The general rule to be applied. Start studying Chapter 15 - Intermediate Accounting. Learn vocabulary, terms, and more with flashcards, games, and other study tools.