taller cinco acco 112

Profesor Noel Ortiz

Profesor Noel Ortiz Torres

Contabilidad Básica IIACCO 112

Taller Cinco

Universidad del Este, Universidad Metropolitana,Universidad del Turabo

Dividendos, Ganacia retenida

y reporte de ingresos

Corporaciones:

Objetivos

1. Preparar las entradas para dividendos y acciones.

2. Identificar las cuentas que se reportan en el “retained earnings”.

3. Preparar y analizar la sección de “comprehensive stockholder’s equity”

4. Describir la forma y contenido de los estados de ingresos y gastos de las corporaciones.

5. Computar el “earning per share”

Una distribución de dinero o acciones para los accionitas en base proporcional.

Tipos de Dividendos:

DividendosDividendosDividendosDividendos

1. Cash dividends.

2. Property dividends.

Dividendos se expresan: (1) como un porciento del valor par o valor establecido, o (2) como una cantidad en dólares por acción.

3. Script (promissory note).

4. Stock dividends.

Los dividendos tienen tres fechas importantes:


Dividendos en efectivo

Para una corporación pagar a dividendos, este tiene que tener:

1. “Retained earnings” (ganancia retenida) – Pagar dividendos de “retained earnings” es legal en todos los estados.

2. Suficiente dinero.

3. Una declaración de dividendos por la Junta de Directores.


What would be the journal entries made by a corporation that declared a $50,000 cash dividend on March 10, payable on April 6 to shareholders of record on March 25?

March 10 (Declaration Date)Retained earnings 50,000

Dividends payable 50,000

March 25 (Date of Record) No entry

April 6 (Payment Date)


Dividends payable 50,000

Cash 50,000

Distribución de dividendos entre acciones preferidas y acciones comunes.


Los accionitas de acciones preferidas que acumlan los dividendos no pagados en años anteriores, los cobran antes que los dividendos para los accionistas de acciones comunes.

ExerciseExercise Arnez Corporation was organized on January 1, 2008. During its first year, the corporation issued 2,000 shares of $50 par value preferred stock and 100,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2008, $6,000, 2009, $12,000, and 2010, $28,000.

Instructions: (a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 8% and not cumulative.


ExerciseExercise (a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 8% and not cumulative.


2008 2009 2010

Dividends declared 6,000$ 12,000$ 28,000$

A llocation to pref er red 6,000 8,000 8,000

Remainder to common -$ 4,000$ 20,000$

* 2,000 shares x $50 par x 8% = $8,000

*

ExerciseExercise (b) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 9% and cumulative.


2008 2009 2010


Dividends in ar rears 3,000


Remainder to common -$ -$ 19,000$

* 2,000 shares x $50 par x 9% = $9,000

*

** 2008 Pfd. dividends $9,000 – declared $6,000 = $3,000

**

ExerciseExercise (c) Journalize the declaration of the cash dividend at December 31, 2010, under part (b).


Retained earnings 28,000

Dividends payable

28,000

2008 2009 2010


Dividends in ar rears 3,000


Remainder to common -$ -$ 19,000$

Journal entry:

Stock Dividends

Pro rata distribution of the corporation’s own stock.


Results in decrease in retained earnings and increase in paid-in capital.

Stock Dividends

Reasons why corporations issue stock dividends:

1. To satisfy stockholders’ dividend expectations without spending cash.

2. To increase the marketability of the corporation’s stock.

3. To emphasize that a portion of stockholders’ equity has been permanently reinvested in the business.


Size of Stock Dividends

Small stock dividend (less than 20–25% of the corporation’s issued stock, recorded at fair market value)

Large stock dividend (greater than 20–25% of issued stock, recorded at par value)


* This accounting is based on the assumption that a small stock dividend will have little effect on the market price of the outstanding shares.

*

10% stock dividend is declaredRetained earnings (5,000 x 10% x $40) 20,000

Common stock dividends distributable 500

Additional paid-in capital 19,500

Stock issuedCommon stock div. distributable 500

Common stock (5,000 x 10% x $1) 500

HH Inc. has 5,000 shares issued and outstanding. The per share par value is $1, book value $32 and market value is $40.


S tockholders' equ ityP aid-in capita l

C ommon stock, $1 par, 5 ,000 issuedand outstanding 5,000$

C om m on stock d ividends d istributab le 500 P aid-in capita l in excess of par 64,500

Reta ined earnings 90,000 Total stockholders' equ ity 160,000$

H H Inc.B alance S heet (partia l)

Stockholders’ Equity with Dividends Distributable


HH Inc. Before After NetDividend Dividend Change

Stockholders' equityPaid-in capital

Common stock, $1 par, 5,000 issuedand outstanding 5,000$ 5,500$ 500$

Paid-in capital in excess of par 45,000 64,500 19,500 Retained earnings 110,000 90,000 (20,000)

Total stockholders' equity 160,000$ 160,000$

Outstanding shares 5,000 5,500 Book value per share 32$ 29$

DividendosDividendosDividendosDividendosEfectos de “Stock Dividends”

$ 0

Which of the following statements about small stock dividends is true?

a. A debit to Retained Earnings for the par value of the shares issued should be made.

b. A small stock dividend decreases total stockholders’ equity.

c. Market value per share should be assigned to the dividend shares.

d. A small stock dividend ordinarily will have no effect on book value per share of stock.


In the stockholders’ equity section, Common Stock Dividends Distributable is reported as a(n):

a. deduction from total paid-in capital and retained earnings.

b. current liability.

c. deduction from retained earnings.

d. addition to capital stock.


“Stock Split”

Reduce el valor en el mercado de la acción.

Para el “stock split” no hay que hacer entrada de jornal.

Disminuye el valor par y aumenta el numero de acciones.


2 for 1 Stock Split

No Entry -- Disclosure that par is now $.50 and shares No Entry -- Disclosure that par is now $.50 and shares outstanding are 10,000.outstanding are 10,000.

HH Inc. has 5,000 shares issued and outstanding. The per share par value is $1, book value $32 and market value is $40.


HH Inc. Before After NetSplit Split Change

Stockholders' equityPaid-in capital

Common stock 5,000$ 5,000$ -$ Paid-in capital in excess of par 45,000 45,000 -

Retained earnings 110,000 110,000 - Total stockholders' equity 160,000$ 160,000$ -$

Outstanding shares 5,000 10,000

Book value per share 32$ 16$

DividendosDividendosDividendosDividendosEffects of Stock Dividends

“Retained earnings” es la ganancia retenida es la ganancia neta que la coporación retiene para el uso.

La ganacia neta aumenta el “Retained Earnings” y la pérdida neta disminuye el “Retained Earnings”.

Retained earnings es parte de la reclamación de los accionistas del total de los activos (assets) de la corporación corporation.

Si el “retained earnings está en débito se llama déficit.

Retained EarningsRetained EarningsRetained EarningsRetained Earnings

Restrictions can result from:

1. Legal restrictions.

2. Contractual restrictions.

3. Voluntary restrictions.

Restriciones “Retained Restriciones “Retained Earnings”Earnings”

Restriciones “Retained Restriciones “Retained Earnings”Earnings”

Companies generally disclose retained earnings restrictions in the notes to the financial statements.

Corrections of ErrorsResult from:

mathematical mistakes mistakes in application of accounting

principles oversight or misuse of facts

Corrections treated as prior period adjustments

Adjustment made to the beginning balance of retained earnings

Prior Period AdjustmentsPrior Period AdjustmentsPrior Period AdjustmentsPrior Period Adjustments

W oods, Inc.S tatem en t of Retained Earn ings

For the Year Ended Decem ber 31, 2008

Balance, January 1 1,050,000$ Net incom e 360,000 D ividends (300,000) Balance, Decem ber 31 1,110,000$

Before issuing the report for the year ended December 31, 2008, you discover a $50,000 error (net of tax) that caused the 2007 inventory to be overstated (overstated inventory caused COGS to be lower and thus net income to be higher in 2007. Would this discovery have any impact on the reporting of the Statement of Retained Earnings for 2008?

Prior Period AdjustmentsPrior Period AdjustmentsPrior Period AdjustmentsPrior Period Adjustments

W oods, Inc.S tatem en t of Retained Earn ings

For the Year Ended Decem ber 31, 2008

Balance, January 1, as p reviously reported 1,050,000$ Prior period ad justm en t - error correction (50,000) Balance, January 1, as restated 1,000,000 Net incom e 360,000 D ividends (300,000) Balance, Decem ber 31 1,060,000$

Retained Earnings Retained Earnings StatementStatement

Retained Earnings Retained Earnings StatementStatement

Retained Earnings Retained Earnings StatementStatementRetained Earnings Retained Earnings StatementStatementThe company prepares the statement from

the Retained Earnings account.

All but one of the following is reported in a retained earnings statement. The exception is:

a. cash and stock dividends.

b. net income and net loss.

c. some disposals of treasury stock below cost.

d. sales of treasury stock above cost.

Retained Earnings Retained Earnings StatementStatementRetained Earnings Retained Earnings StatementStatement

Statement Analysis and Statement Analysis and PresentationPresentation


Stockholders’ Equity Analysis

Net Income Available to Common Stockholders

Return on Common Stockholders’ Equity

= Average Common Stockholders’ Equity



This ratio shows how many dollars of net income the company earned for each dollar invested by the stockholders.

Income Statement Presentatio

n



Income Statement Analysis

Net Income minus Preferred DividendsEarnings Per Share

= Weighted-Average Common Shares Outstanding



This ratio indicates the net income earned by each share of outstanding common stock.

The income statement for Nadeen, Inc. shows income before income taxes $700,000, income tax expense $210,000, and net income $490,000. If Nadeen has 100,000 shares of common stock outstanding throughout the year, earnings per share is:

a. $7.00.

b. $4.90.

c. $2.10.

d. No correct answer is given.

($490,000 / 100,000 = $4.90)

Statement Analysis and Statement Analysis and PresentationPresentationStatement Analysis and Statement Analysis and PresentationPresentation

taller cinco acco 112

Documents