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Issued common stock for cash came from what section on the statement of cash flow?
Financing activities section
Are dividends paid on treasury stock?
cash dividends are not paid on treasury stock, but what about stock dividends? I would think stock dividends would apply to treasury shares, but would like to know for sure. Also, I assume stock splits apply to treasury shares and would like this verified.
Which firms are most likely to use bank financing rather than to issue bonds or stock to finance their activities?
Smaller firms that are sole pripiortorships or partnerships that are not incorporated and not public companies are more likely to use bank financing.
Define treasury stock and explain why a corporation would purchase its own stock?
Treasury StockCommon stock that has been repurchased by the company and held in the company's treasury. These shares don't pay dividends, have no voting rights, and are not part of the total number of shares outstanding, although they are still counted as part of shares issued.See also "Stock Repurchase".Outstanding stock, purchased by the corporation, is known as treasury stock.The reasons as to why corporations buy back their outstanding stock include:☺to increase earnings per share and return on equity☺to provide tax efficient distributions of excess cash to shareholders☺to provide stock for employee stock compensation contracts☺to thwart takeover attempts☺to create or improve the market for the stock^_^
What is floor-stock financing?
Floor stock financing is the term used when an auto dealership obtains financing from a bank in order to buy new vehicles for their lot. This is usually a short term loan and is repaid as the vehicles are sold.
How do treasury stock affect Cash flow statement?
treasury stock is shown under cash flow from financing activities as a reduction in cash.
What items is reported on the statment of cash flows under financing activities?
A) Cash purchases of equipment B) Cash purchases of bonds issued by another company C) Cash received as repayment for bonds loaned D) Cash purchase of treasury stock
Is treasury stock the same as capital stock?
Treasury stock is contra of capital stock used by company to purchase own capital stock to reduce the paid in capital.
How do you record journal entry for purchase of treasury stock?
debit treasury stockcredit bank / cash
The journal entry to record the purchase of treasury stock will cause total stockholders' equity to decrease by the amount of the cost of the treasury stock?
true!
When it comes to the items on the statement of cash flows would you expect a stock dividend to appear in the financing section?
If stock dividend is received then it will be shown under cash flows from investing activities while if stock dividend is paid then it is shown under cash flow from financing activities.
Would a purchase of treasury stock affect retained earnings?
Answer:The purchase of treasury stock does not affect retained earnings. When the company owns treasury stock, then 'treasury stock' has a debit balance. It is nevertheless presented under equity, with a negative sign.(Technically, when a T-account switches from debit to credit - or the other way around - the sign flips.)Nevertheless, a subsequent sale of treasury stock can affect retained earnings when the amount received is below the cost (a loss is made). This loss is subtracted from retained earnings if there are no cumulative gains on prior sales of treasury stock.
What effect does the purchase of treasury stock have on net income?
Purchase of treasury stock has no effect on the net income of a business. The purchase may affect cash flow of the business. No profit or loss is claimed when shares are re-issued at above or below cost.
Issued common stock for cash came from what section on the statement of cash flow?
Financing activities section
Is a commonly used method for accounting for the purchase and resale of treasury stock is the derivative method?
no
Is treasury stock included in common equity?
Treasury stock is contra to share capital account as it is those shares which company purchase from own capital to reduce the share capital amount.
Where the event common stock issued for cash would appear indirect statement of cash flows?
Common stock issued for cash will be appear under cash flows from financing activities in indirect method of cash flow statement.
