The following data were obtained from the cash flow statements (prepared using the indirect method) of The
Question:
Instructions:
1. Using the information given, estimate the December 31, 2006, balances in the following accounts.
(a) Cash
(b) Paid-In Capital from Common Stock
(c) Retained Earnings
(d) Treasury Stock
2. Comment on the size of the December 31, 2006, balance in the paid-in capital from common stock account in relation to the balance in the treasury stockaccount.
2006 2005 004 2003 Net Income Cash from operating activides Cash from Investing activitles. Cash from financing activities $5,080 4,872 4,847 $4,347 5.968 5,456 (1,700) (1.496)503 (936) 5,957 6.423 1.026 (2,02) 2460 (316) 19) 178 Issuances of debt Payments of debt Issuances of stock Purchases of stock for treasury 617 3,030 148 193 ..(2,416) 0 (739) (1,440) Dividends At january 1, 2003, the following items had the Indicated balances: 2,260 Pald-In Capital from Common Stock (Includes par value and additional pald-in capital) Retalned Earnings Treasury Stock 4.730 24,506 4,389
Step by Step Answer:
1 a Increases and decreases in Cash for each year are as follows 2006 2005 2004 2003 Cash from opera...View the full answer
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Related Video
Treasury stock refers to shares of a company\'s own stock that the company has bought back from its shareholders and now holds as a form of asset on its balance sheet. When a company buys back its own stock, it reduces the number of outstanding shares in the market, which can potentially increase the value of the remaining shares. Treasury stock can be acquired through a variety of methods, such as open market purchases, negotiated transactions, or as a result of converting convertible securities. Companies may buy back their own shares for a number of reasons, including to return capital to shareholders, to signal confidence in the company\'s future, or to use the shares for employee stock option plans. While treasury stock does not pay dividends, it can be reissued by the company at a later time, which could dilute the value of the remaining shares. Companies are required to report their treasury stock holdings in their financial statements.
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