Gerstner Corporation is authorized to issue 10,000 shares of $40 par value, 10% preferred stock and 200,000 shares of $5 par value common stock. On January 1, 2014, the ledger contained the following stockholders’ equity balances. Preferred Stock (5,000 shares) $200,000 Paid-in Capital in Excess of Par—Preferred Stock 60,000 Common Stock (70,000 shares) 350,000 Paid-in Capital in Excess of Par—Common Stock 700,000 Retained Earnings 300,000 […]

Reconciliation of Income and Shareholders’ Equity: The United States and Chile Foreign companies whose shares are registered on U.S. security exchanges must file a description of significant differences between U.S. and domestic accounting principles with the SEC as well as a reconciliation of net income and shareholders’ equity under domestic and U.S.GAAP. Gold plate Company, Inc., a Chilean firm, included the following information: 1. Differences […]

Kingsley Corporation has been authorized to issue 40,000 shares of $100 par value, 8%, noncumulative preferred stock and 2,000,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders’ equity. Preferred Stock $ 240,000 Paid-in Capital in Excess of Par—Preferred Stock 56,000 Common Stock 2,000,000 Paid-in […]

Interpreting Financial Statements: Affiliated Firms The PolyGram Group includes businesses around the world that are chiefly involved in acquisition, production, and marketing in the music industry, as well as the manufacture, sale, and distribution of prerecorded sound carriers, such as compact discs, cassettes, and records. In addition, PolyGram is engaged in activities with respect to music video, in the production of films and television programming, […]

Interpreting Financial Statements: Effects of U.S. GAAP Polygram’s financial statements included the following additional disclosure: The calculation of Net income substantially in accordance with U.S.GAAP is as follows (in millions of Netherlands guilders): 1994 1993 Net income per PolyGram’s Consolidated Statements of Income 738 614 Adjustments to reported income: a. Amortization of goodwill (27) (26) b. Amortization of intangible assets (57) (64) c. Remeasurement of […]

Foreign Currency Effects Boise Cascade Company is a major producer of paper, building, and office products. The company reported the following items related to foreign exchange gains and losses in its 1993 financial statements (dollars in thousands): 1993 1992 Foreign exchange gain $1,610 $6,590 Notes: Foreign exchange gains and losses reported on the Statements of Income (Loss) arose primarily from activities of the Company’s Canadian […]

Financial Analysis in the U.S. and U.K. Access the EDGAR archives and locates the Schedule 14D1 filing (February 1, 1995) made by Cadbury Schweppes on the successful acquisition of Dr. Pepper/Seven-Up Companies Inc. Hint: Search on “Cadbury” or “Dr. Pepper.” Examine the section that contains the financial statements of the U.K. corporation and locate the information on differences between U.K. GAAP and U.S. GAAP. In […]

Financial Analysis in the U.S. and U.K. Access the EDGAR archives and locate the Schedule 14D1 filing made by either Amdura Corporation or FKI plcon March 22, 1995 (they are identical). Hint: You can search for this filing on the SEC database by inputting the name of either company. It was filed when FKI plc, a U.K. corporation, made a successful tender offer for Amdura […]

Gilliam Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review his textbooks on the topic of corporation accounting. During the first month, the accountant made the following entries for the corporation”s capital stock. May 2 cash 130,000 capital Stock 130,000 (Issued 10,000 shams of $10 par value […]

The stockholders’ equity section ofAluminum Company of America (Alcoa)showed the following (in alphabetical order): additional paid-in capital $6,101, common stock $925, preferred stock $55, retained earnings $7,428, and treasury stock 2,828. All dollar data are in millions. The preferred stock has 557,740 shares authorized, with a par value of $100 and an annual $3.75 per share cumulative dividend preference. At December 31 of the current […]