What is the treasury stock method of accounting for outstanding stock options, warrants, and rights in computing
Question:
Step by Step Answer:
The treasury stock method is a means of determining the ex...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.
Students also viewed these Accounting questions
-
What is the treasury stock method? How is the increase in the diluted earnings per share denominator determined under the treasury stock method?
-
In accounting for mutual ownerships, what is the treasury stock approach?
-
The allowance method of accounting for uncollectible accounts receivable involves the creation of contra account that shows the estimated amount of uncollectible receivables. Why would financial...
-
prepare a post-closing trial balance. Cash Account Titles Accounts Receivable Supplies Accounts Payable Unearned Service Revenue Owner's Capital Owner's Drawings Service Revenue Salaries and Wages...
-
Read the article titled, "What Manufacturers Need to Know about Transfer Pricing". Next, assess the major potential problems that a multinational firm could encounter when using negotiated transfer...
-
The bureaucratic organization described by Max Weber is similar to the ____________ organization described by Burns and Stalker. (a) adaptive (b) mechanistic (c) organic (d) adhocracy
-
Regional Support for Same Sex Marriage The website http://www.pewresearch.org/ fact-tank/2014/10/15/gay - marriage - arrives - in -the - south-where-the-public-is-less-enthused shows the changing...
-
Cabo Company has $1,000,000 in assets and $1,000,000 in stockholders' equity, with 40,000 shares outstanding the entire year. It has a return on assets of 10%. During 2016, it had net income of...
-
At the end of the accounting period, Harris Company had $6,000 of par value common stock issued, additional paid in capital of $5,500, retained earnings of $6,000, and $2,000 of treasury stock. What...
-
Consider the following 0x86 program: .data array DWORD 1,2,3,4,5,6,7,8,9 aravSize -(S-array)/4 ; array .code main PROC mov ecx,arraySize-1 mov esi.OFFSET array L1: mov eax. [esi] sda mov bx,2 idiv bx...
-
What is an antidilutive security? Why are such securities generally excluded from the computation of EPS?
-
Convertible debt that is dilutive requires an adjustment to income. What is the nature of the adjustment?
-
One of the major controversies in project management occurs over whether the project manager needs a command of technology in order to be effective. Consider the following situation: You are the...
-
What is the network architecture used in e-commerce? Please explain how each layer is related.
-
What is the difference between a thin client and a fat client?
-
What are some of the inherent limitations and disadvantages of a file server system?
-
Have each group member select a different functional group. Individually, draw and name a compound containing your functional group. Pass your drawing to the group member on your right and your...
-
What is a file server system, and what kind of network environment does it use?
-
Can a current tax deduction for salaries and wages include payments for services performed in past years and for services to be performed in future years? Why is a sole proprietor not entitled to a...
-
Explain the term global capital markets. This chapter primarily discusses global equity markets. What other types of financial instruments are traded in these markets? How important are global...
-
In Problems 916, find the indicated first-order partial derivative for each function z = f(x, y). fx(x, y) if f(x, y) = 7x + 8y - 2
-
Describe the current convergence efforts of the FASB and IASB in the area of accounting for taxes.
-
In 2010, Amir ante Corporation had pretax financial income of $168,000 and taxable income of $120,000. The difference is due to the use of different depreciation methods for tax and accounting...
-
Oxford Corporation began operations in 2010 and reported pretax financial income of $225,000 for the year. Oxfords tax depreciation exceeded its book depreciation by $40,000. Oxfords tax rate for...
-
What is one way in which a leader can apply the "Status" part of the SCARF model to trigger the "Reward" response?
-
Complete the table to assess risks and develop contingencies for resources you are planning for. Potential risks Planned Response Risk associated with the acquisition or implementation of the...
-
Assignment: persuasive essay for or against Andrew Jackson. In you essay answer the question "Was he a "people's president" or was he more like a king?" Documentary:...
Study smarter with the SolutionInn App