Our Blog – More About our Services

Auditing Stockholders’ Equity You have been assigned to the audit of Belcore Inc., a manufacturing company. You have been asked to summarize the transactions for the year ended December 31, 2008, affecting stockholders’ equity and other related accounts. The...

Sample CPA Exam Questions 1. On January 2, 2009, Kine Co. granted Morgan, its president, compensatory stock options to buy 1,000 shares of Kine’s $10 par common stock. The options call for a price of $20 per share and are exercisable beginning on December 31, 2009....

Strategic Conversion of Preferred Stock Colter Corporation suspended dividend payments on all four classes of capital stock outstanding because of a downturn in the economy. The four classes of stock include 7% preferred stock, cumulative, $50 par; 5% preferred stock,...

Treasury Stock Transactions—You Can’t Lose! The following is adapted from an article appearing in Forbes: The board of HOSPITAL CORP. OF AMERICA authorized the buyback of 12 million of the firm’s own shares at a total cost of $564 million. However, after the stock...

How Much Should Our Dividend Be? Largo Corp. has paid quarterly dividends of $0.70 per share for the last three years and is trying to continue this tradition. Largo’s balance sheet is as follows: Largo Corp Balance Sheet December 31, 2008 Assets   Liabilities...

Treasury Stock: Par Value and Cost Methods The stockholders’ equity of Thomas Company as of December 31, 2007, was as follows: Common stock, $1 par, authorized 275,000 shares;   240,000 shares issued and outstanding  $ 240,000 Paid in capital in excess of...

Accounting for Stock Warrants Western Company wants to raise additional equity capital. After analysis of the available options, the company decides to issue 1,000 shares of $20 par preferred stock with detachable warrants. The package of the stock and warrants sells...

Accounting for a Performance Based Stock Option Plan Rhiener Corporation initiated a performance based employee stock option plan on January 1, 2007. The performance base for the plan is net sales in the year 2009. The plan provides for stock options to be awarded to...

Stock Appreciation Rights San Juan Corporation established a stock option plan that provides for cash payments to employees based on the appreciation of stock prices from an established option price. The plan was instituted on January 1, 2008, and provides benefits to...