F1-M3 Stockholders Equity Flashcards
What impact does treasury stock have on RE/NI
Has no effect on retained earnings or net income
What happends to stockholders equity when a stock dividend is issued?
No impact to stockholders equity, the reduction is RE is offset by the new common stock obtained
What is the effect to equity of purchasing treasury stock
Reduction is stockholders equity.
What happens when a large stock dividend is declared. 20% and more.
When large stock dividend is declared. RE is debited for the amount for the par value of the dividend.
How to corporations report G/L on treasury stock.
Crediting APIC, it is not considered a “Gain” on treasury but a gain on APIC
What is the net impact is retained earnings from DIV declared
RE-DIV=Net impact (credit)
What happens to common stock when treasury stock is sold
When a company has a starting common stock balance and than has treasury stock transactions it DOES NOT AFFECT COMMON STOCK.
What happens to stockholders equity when stocks are donated to a corporation
There is no change in stockholders equity
What needs to be considered when stocks are participating?
Preferred shareholders get an extra piece based on the total capitalization (Shares*Par value)
How do stock splits effect the total outstanding common shares?
They multiply total outstanding common shares by the amount for ALL RETROSPECTIVE YEARS.
What is total shares outstanding
Issued shares minus treasury stock
What is the book value per common share?
Common stockholders equity/ common shares outstanding
