Brian Construction Company has the following stockholders equity on January 1, 2011, the date on which Roller
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8%cumulative preferred stock (5,000 shares, $100par) ........ $ 500,000
Common stock(40,000 shares, $20par) .............. 800,000
Retained earnings ....................... 200,000
Total stockholders’ equity .................... $1,500,000
Brian Construction Company did not pay preferred dividends in 2010.
1. Prepare a determination and distribution of excess schedule. Assume that the preferred stock’s liquidation value is equal to par and that any excess of cost is attributable to goodwill.
2. Assume Ace Construction has the following net income (loss) for 2011 and 2012 and does not pay any dividends:
2011 income ........ $70,000
2012 income ......... 40,000
Roller maintains its investment account under the cost method. Prepare the cost-to-equity conversion entries necessary on Roller Company’s books to adjust its investment account to the simple equity balance as of January 1, 2013.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....
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Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
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