Question: The following are selected transactions that may affect shareholders equity

The following are selected transactions that may affect shareholders’ equity.
1. Recorded accrued interest earned on a note receivable.
2. Declared a cash dividend.
3. Effected a stock split.
4. Recorded the expiration of insurance coverage that was previously recorded as prepaid insurance.
5. Paid the cash dividend declared in item 2 above.
6. Recorded accrued interest expense on a note payable.
7. Recorded an increase in the fair value of an investment accounted for using fair value through other comprehensive income (FV-OCI) that will be distributed as a property dividend. The carrying amount of the FV-OCI investment was greater than its cost. The shares are traded in an active market.
8. Declared a property dividend (see item 7 above).
9. Distributed the investment to shareholders (see items 7 and 8 above).
10. Declared a stock dividend. 11. Distributed the stock dividend declared in item 10. 1
2. Repurchased common shares for less than their initial issue price.
(a). In the table below, assuming the company follows IFRS, indicate the effect that each of the 12 transactions has on the financial statement elements that are listed. Use the following codes: increase (I), decrease (D), and no effect (NE).
(b). Would the effect of any of the above items change if the company were to follow private enterprise GAAP?

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  • CreatedAugust 23, 2015
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