/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Question 6IFRS Indicate how each of the followi... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 15: Question 6IFRS (page 825)

Indicate how each of the following accounts should be classified in the Equity section.

  1. Share Capital鈥擮rdinary.
  2. (b) Retained Earnings.
  3. Share Premium鈥擮rdinary.
  4. Treasury Shares.
  5. Share Premium鈥擳reasury
  6. Share Capital鈥擯reference
  7. Accumulated Other Comprehensive Income.

Short Answer

Expert verified

Each of the accounts will mention in the equity section with a different classification.

Step by step solution

01

Meaning of Equity

Equity, commonly referred to as shareholders' value (or owners' value for privately held companies), represents the amount of money that would be returned to the company's shareholders if all resources were sold, and in case of liquidation, all the debts of the company were paid.

02

Classification of different accounts in the Equity section

The Classification is made as given below:

Accounts

Classification

  1. Share Capital-Ordinary

Share capital

  1. Retained earnings

Retained earnings

  1. Share Premium-Ordinary

Share premium

  1. Treasury Shares

Deducted from total equity

  1. Share Premium- Treasury

Share Premium

  1. Share Capital-Preference

Share capital

  1. Accumulated Other

Comprehensive Income

Added to total Equity

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Sprinkle Inc. has outstanding 10,000 shares of \(10 par value common stock. On July 1, 2017, Sprinkle reacquired 100 shares at \)87 per share. On September 1, Sprinkle reissued 60 shares at \(90 per share. On November 1, Sprinkle reissued 40 shares at \)83 per share. Prepare Sprinkle鈥檚 journal entries to record these transactions using the cost method.

Dividends are sometimes said to have been paid 鈥渙ut of retained earnings.鈥� What is the error, if any, in that statement?

Arantxa Corporation has outstanding 20,000 shares of \(5 par value common stock. On August 1, 2017, Arantxa reacquired 200 shares at \)80 per share. On November 1, Arantxa reissued the 200 shares at $70 per share. Arantxa had no previous treasury stock transactions. Prepare Arantxa鈥檚 journal entries to record these transactions using the cost method.

(Preferred Dividends) Matt Schmidt Company鈥檚 ledger shows the following balances on December 31, 2017.

7% Preferred stock鈥擻(10 par value, outstanding 20,000 shares \) 200,000

Common stock鈥擻(100 par value, outstanding 30,000 shares 3,000,000

Retained earnings 630,000

Instructions

Assuming that the directors decide to declare total dividends in the amount of \)366,000, determine how much each class of stock should receive under each of the conditions stated below. One year鈥檚 dividends are in arrears on the preferred stock.

  1. The preferred stock is cumulative and fully participating.
  2. The preferred stock is noncumulative and nonparticipating.
  3. The preferred stock is noncumulative and is participating in distributions in excess of a 10% dividend rate on the common stock.

Discuss the propriety of showing:

  1. Treasury stock as an asset.
  2. 鈥淕ain鈥� or 鈥渓oss鈥� on sale of treasury stock as additions to or deductions from income.
  3. Dividends received on treasury stock as income.
See all solutions

Recommended explanations on Business Studies Textbooks

Sales in Business

Read Explanation

Intermediate Accounting

Read Explanation

Business Development

Read Explanation

Managers

Read Explanation

Business Case Studies

Read Explanation

Nature of Business

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.