Exam (elaborations)
ACG 3141 Johnson - Exam 2 (1).
- Course
- Institution
ACG 3141 Johnson - Exam 2 (1).
[Show more]
Seller
Follow
modockochieng06
Content preview
ACG 3141 Johnson - Exam 2Primary sources of shareholder's equity - ANS-* proprietorship
* partnership
* corporation
- most important
- all of the fortune 500 corporations
Direct Costs associated with equity issuance - ANS-* accounting/legal fees
* underwriting costs
* printing costs
* taxes
Accounting for direct costs associated with equity issuance - ANS-Dr. Cash
Cr. Common Stock and APIC
- you deduct expenses out of cash and APIC accounts when accounting for direct costs
Lump Sum proportional method allocation - ANS-fair value of common (1000 x 20)
fair value of preferred (1000 x 12)
Aggregate fair value = $32,000
allocation to common: (20,000/32,000) x 30,000 = 18,750
allocation to preferred: (12,000/32,000) x 30,000 = 11, 250
Total allocation = $30,000
Lump Sum Incremental method allocation - ANS-Only fair value of common stock is known:
lump sum reciept = 30,000
allocation to common: (1000 x 20) = 20,000
Balance allocated to preferred: 10,000
Record lump sum sales using either proportional/incremental method - ANS-Dr. Cash
Cr. Common Stock, APIC - C/S, Preferred Stock, APIC - P/S
Record Stock Issuance for noncash - ANS-Should record @ fair value or stock issued or the fair
value of noncash consideration
Dr. Non-cash consideration
Cr. Common Stock, paid in capital
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller modockochieng06. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now