In this simulation, you are asked to address equations related to the accounting for equity. Prepare responses to all parts.

Explanation
(a) Explain why common stock is classified as part of equity.
(b) Explain why treasury shares are not classified as an asset.
(c) Explain what is meant by €œAccumulated other comprehensive loss.€
(d) Why is the accumulated deficit larger in the current year than in the prior year?
Analysis
Compute book value per share for AMR for the currentyear:

Transcribed Image Text:

KWW Professional Simulation 口回噐 Time Remaining 4 hours 10 minutes 團圓團园国®REİ Equity Presented below are the equity sections for AMR Corporation (USA), which reports under U.S. GAAP All amounts are in millions, except number of shares and par value Current Year ior Year Equity (Deficit) Common stock (Share capitalordinary) $1 par value, 750,000,000 shares authorized; 182,350,259 shares issued Additional paid-in capital Treasury shares at cost: current year-21,194,312; prior year-22,768,027 Accumulated other comprehensive loss Accumulated deficit $ 182 2,521 (1,308) (664) (1,312) $182 2,605 (1,405) (785) (551) S (581) 46