The stockholders' meeting for Kissinger Corporation has been in progress for some time. The chief financial officer for Kissinger is presently reviewing the company's financial statements and is explaining the items that comprise the stockholders' equity section of the balance sheet for the current year. The stockholders' equity section of Kissinger Corporation at December 31, 2014, is as follows. At
At the meeting, stockholders have raised a number of questions regarding the stockholders' equity section.
With the class divided into groups, answer the following questions as if you were the chief financial officer for Kissinger Corporation.
(a) "What does the cumulative provision related to the preferred stock mean?"
(b) "I thought the common stock was presently selling at $29.75, but the company has the stock stated at $1 per share. How can that be?"
(c) "Why is the company buying back its common stock? Furthermore, the treasury stock has a debit balance because it is subtracted from stockholders' equity. Why is treasury stock not reported as an asset if it has a debitbalance?"
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
This problem has been solved!
Financial and managerial accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso