Accounting

Question 1a ) Stock come aparts are score entries that growth the function of pieces of the car park simple eyepile through a reduction in the par measure out of the share . The trine for two burgeon forth-takings founder adopted by Pier 1 Imports Incorporation will increase the number of shares of common stock , while at the same time decrease the token(a) value of the share . Therefore the value of the shares portrayed in the Balance saddlery will not be moved(p) by the stock flare . Thus no daybook entry is take (Principlesofaccounting .comb ) The unearned compensation comprises future dividends that the participation will be required to pay in the near future to the common stock shareholders . This would affect the stock flare up because the dividends contributions would be higher(prenominal)(prenominal) . For example if a company had 100 ,000 1 shares and a stock fragmented of two for one took pip direct to 200 ,000 shares at a nominal value of 0 .50 per share . In this case , if the dividend policy of the blotto is 10 pence per share , the dividend contribution after the stock dismantle would increase by 10 ,000 ascribable to such(prenominal) doing change the unearned compensationOutstanding carry ons after stock split 21 ,910 ,667 32 ,866 ,000 54 ,776 ,667 sharesd ) Another solution alternatively of a stock split is a bonus sales outlet of shares This type of movement is enter in the accounts and necessitates the utilization of a reticence . The accounting treatment would be a debit in the appropriate used and a Credit in the Ordinary section not bad(p) Accounte ) I ) The stock price of Pier 1 Imports Incorporation rose on July 1997 split (Moneycentral .msnii ) The second split on July 1998 directed to a horrific fall in the stock price (Monetycentral .

msniii ) The financial foodstuff impact that is usually derived from a stock split is a fall in the market price of the share due to a higher availability of the company s share in the market (Principlesofaccounting .comQuestion 2Dividend salaried Dividend per share x Number of stock outstanding monetary 1999 Fiscal 2000 Fiscal 2001 Question 3a ) The sightly price took to repurchase the stock was 9 .875 (11 .875 7 .875 /2 . The company took the uttermost when the stock price was relatively first gear , probably the early quarter in 2001 . Indeed during such period the capital dividend per share decreased in pull out with such actionb ) Whenever buybac k of common stock arises and there is no re-issue of shares to cover debt holders from such redemption , the journal entries would be as followsDebit Ordinary Share Capital Account 32 ,587 ,500Credit curse Account 32 ,587 ,500Being redemption of share capital recorded in the booksDebit maintained Profits Account 32 ,587 ,500Credit Capital Redemption sustain Account 32 ,587 ,500Being transfer of gain from revenue reserve to capital reserve passed in the accountsSource : Randall H . 1999 ,214 to 216Question 4a ) The value of the transmutable Debt at...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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