As companies grow, their per share market price usually increases and sometime it becomes too expensive or even unaffordable for common investor. In such situations companies usually use a device known as stock split to lower the market price of their stock and make it more affordable for all investors. What is stock split? Stock split is a practice of increasing the total number of shares of common stock outstanding and making a proportional decrease in the per share par value so the total amount of all the shares outstanding remains unchanged. For example, ABC company currently has 50,000 shares of $10 par value common stock outstanding and decides a 2-for-1 stock split. After this split, the company will have 100,000 shares of $5 par value common stock outstanding but the total par value of shares will remain the same as before the split. A stockholder who currently owns 100 shares of ABC company will own 200 shares after split.
How does stock split affect the market price? The primary purpose of stock split is to decrease the market price of company’s share. This practice immediately decreases the market price of a company’s stock because the number of shares outstanding are increased without any increase in assets and total stockholders equity. For example, If the current market price of ABC company’s stock is $120 per share, hopefully it will come down to $60 per share immediately after 2-for-1 stock split. The concept explained so for is summarized below: Accounting/Journal entry: Stock split does not change the balance of any account so it is recorded by making only a memorandum entry. The memorandum entry of ABC company for a 2-for-1 stock split will be made as follows: Example: The stock holders’ equity section of the of Western company at December 31, 2013, is given below: On 31 January 2014, the board of directors proposed a 5-for-4 stock split. The proposal was approved and new shares were distributed among stockholders.
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Required:. Compute the number of shares that were distributed among stockholders as a result of 5-for-4 stock split. Compute the par value per share after this split. What accounting entry will be made for this split?. Show stockholders’ equity section of the company immediately after 5-for-4 stock split. Solution: (1).
New shares distributed: Number of shares before stock split: 80,000 shares Number of total shares after 5-for-4 stock split: (80,000/4 ) × 5 = 100,000 shares Additional shares distributed among stockholders as a result of stock split: 100,000 – 80,000 = 20,000 shares (2). Par value per share after split: $800,000/100,000 shares = $8 (3). Accounting/journal entry: The Western company will make the following memo entry to show the change in number of shares of common stock outstanding and the change in per share par value: (4). Stockholders equity after 5-for-4 stock split: Notice that there is no impact on the total par value of common stock and the total stockholders’ equity of Western company. These two amounts are the same as before 5-for-4 stock split. I want the answer of that example The Btca company was organize in 1997 authorised the corporation to issue 1000,000yh are for $1 part value common stock and additional 25000 share of 4% $20 part share value cumulative convertible prefer stock There are transaction that related to the company stock during 1996 Feb 12.issued 100,000 share of common stock for 125,000,20 issued,300,000 share of share of common stock for accounting and legal services,the service we’re billed to company athat 3600.
Issued 120,000 share of common stock to Edward Jackson in exchange building and land that held appraised value of 100,and 25,000 repectively Apr 2.purchase 20,000 share of common stock for treasury at $1.25 pre share from on individual who change about to invest in company Jul 1. Issued 25,000 share of prefered stock for 500,000 September 30 sold 100,000 share in treasury for $1.5 pre share Dec 30. The company reported net income ofrom 40,000 for 1991 and the border declare dividend of 25,000 payable on on January 15 to stockholders of recode on January 8 dividend including preferred stock cash dividend. Required: 1/ Journlize entries to recored these trasa cation then close income statement and cash dividend account to record dividend payable 2/prepare the balance sheet of this company Send the solution on Thank you I need the answer.
The improved Batch Enter Transactions’ feature in is designed for accounting professionals who want to work more efficiently and profitably when providing write-up services for their clients. It also is good for companies using and want to quickly add data to their QuickBooks file.
This feature is included with QuickBooks Accountant 2014 and all editions of QuickBooks Enterprise Solutions 14.0 software. Use Batch Enter Transactions for adding the following transaction types to a QuickBooks data file:. Checks. Deposits. Credit Card Charges or Credits. New for 2014!
Bills and Bill Credits. New for 2014! Invoices and Credit Memos With Batch Enter Transactions feature you can:. Enter transactions in batch on a screen designed for power data entry. Paste 1,000+ transactions from Excel and save the information all at once. Easily enter after-the-fact transactions into a customizable data entry grid.
Choose from multiple data fields and which order to display the columns of data Save hours of time entering multiple transactions, such as those from handwritten documents. View this feature in action on or click the box below (note: in some browsers, the YouTube box may not be visible; click on to see the video): Follow these few steps for using the improved Batch Enter Transactions feature: 1. Launch Batch Enter Transactions from the Accountant Center or the Accountant menu.
For QuickBooks Enterprise users, you can access the Batch Enter Transactions from Banking, on the menu bar. Select the desired transaction type from checks, deposits, credit card charges, credits, bills and bill credits, invoices and credit memos. Click Customize Columns button on the right to display the columns of data desired and to rearrange the order of the columns. Begin typing data into the Batch Enter Transactions grid for the selected transaction type. For the Write Check or Invoice transaction type, QuickBooks will automatically populate the next incremental transaction number. Optionally, select a specific row, and click the Split button in the lower left. The image below shows how to enter multiple lines for a single customer invoice.
Optionally, copy Excel data to the clipboard (using any common Excel copy functionality include right-clicking and selecting copy or highlighting cells of data and selecting the Ctrl + C on your keyboard). Caution: Make sure your columns of data in the Batch Enter Transactions dialog window match the cells of data you are copying in Excel. If you are not using account numbering, you will need to type the name of the account exactly as it is in QuickBooks. If the account, name or item is not found in the file you will have the option to add it to the respective list. On the Enter Batch Transactions dialog box, right click with your cursor in the field you want to populate.
In the image below, I have selected the top left cell and after selecting Paste from the right click menu, the data from Excel will prefill the grid. For any fields without matching data in QuickBooks, begin typing the proper information for the field. The Customer:Job field displayed in red in the image below is does not exist in the QuickBooks file. Select the file with your cursor and QuickBooks will provide the option of adding it to your QuickBooks file. Note: In the lower right you can see the total of the transactions to be saved and compare with your original source documents. Click the Save Transactions button and QuickBooks notifies you of the number and type of transactions saved to your QuickBooks file. A quick review of your accounts receivable register shows the added transactions.
If any transactions were incomplete, they will be displayed in the Batch Enter Transactions window for you to complete. The single item displayed below was missing the item on the excel spreadsheet. Now, wasn’t that easy! Accounting professionals providing write-up work can be more profitable by working more efficiently. QuickBooks Enterprise Solutions 14.0 users can access this same feature for entering batch transactions. Laura Madeira is the owner of ACS, Inc., an Intuit Premier Reseller located in the Greater Dallas area.
She was recently selected to the Top 10 QuickBooks ProAdvisors for the second straight year. She is one of the original members of the Intuit Trainer/Writer Network, has been a guest speaker for Intuit for many years and was a founding member of the Intuit Customer Advisory Council. She is Advanced QuickBooks Certified, Advanced QuickBooks Online Certified, Enterprise and Point of Sale Certified.
She also is a Sage Certified Consultant representing Sage 100 Contractor software, and has written several QuickBooks training books and self-paced training videos. In her spare time, she enjoys photography, art, reading, and camping with her sisters and their families.
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