Requirement 1 Date Accounts And Explanation

P13 38arequirement 1dateaccounts And Explanationdebitcreditjan 16reta

Analyze, journalize, and prepare financial statement sections for various corporate transactions, including stock issuance, dividends, treasury stock transactions, partnership contributions, profit allocations, asset sales, and liquidation, based on provided detailed account data and timelines.

Paper For Above instruction

The comprehensive financial activities of corporations and partnerships involve meticulous recording of transactions and accurate preparation of financial statements. These processes are essential for maintaining transparency, compliance, and informed decision-making. This paper discusses the fundamental accounting procedures pertinent to stock issuance, dividends, treasury stock transactions, partnership formation and profit sharing, asset liquidation, and company liquidation, illustrating their significance through detailed examples.

Corporate transactions such as issuing stock, declaring dividends, and conducting treasury stock activities require adherence to precise journal entries and proper presentation in financial statements. For instance, in the case of B-Mobile Wireless, the company issued common and preferred stocks, declared dividends, and subsequently paid dividends, which directly impact the stockholders’ equity section of the balance sheet. The issuance of stock involves recording assets received (like cash or property) against the stock accounts and any additional paid-in capital when the issuance price exceeds the par value (Kieso, Weygandt, & Warfield, 2019). Similarly, dividend declarations and payments are recorded as either liabilities (dividends payable) or reductions of retained earnings, affecting the overall equity (Arnold, 2019).

Treasury stock transactions, exemplified by Summerborn Manufacturing, illustrate the repurchase and resale of a company's own shares. Purchasing treasury stock increases the treasury stock account—a contra-equity account—while reselling these shares influences cash, treasury stock, and additional paid-in capital if sold above or below cost. These activities impact earnings per share and return on equity ratios, which are critical for investors' analysis (Weygandt, Kimmel, & Kieso, 2020).

Partnership accounting, such as in the case of Lorena Lally and Allie Raras, involves recording initial contributions at fair market value, allocating profits per partnership agreements, and preparing the partnership balance sheet. When the partnership earns income, profits are distributed according to the partners’ agreed ratios; withdrawals are deducted from their capital accounts. Upon liquidation, the partnership's non-cash assets are sold, and the proceeds are allocated to partners based on their capital balances and rights (Nobes & Parker, 2018).

Listing specific journal entries, such as those for the sale of assets or stock, and preparing relevant financial statement sections—especially stockholders’ equity—are vital skills for accountants. For example, the sale of non-cash assets at a profit or loss impacts the balance sheet and income statement, requiring careful calculation of gain or loss and appropriate journal entries (Higgins, 2018).

Furthermore, detailed record-keeping of dividends declared and paid—both cash and stock dividends—is necessary for compliance and accurate reporting. Stock dividends, often declared as a percentage of existing shares, are accounted for by transferring amounts from retained earnings to stock dividend distributable or common stock accounts, affecting share capital structure (Ross, Westerfield, & Jaffe, 2019).

In liquidation scenarios, like in the partnership or corporate contexts, the balances of assets and liabilities are adjusted, and distributions are made to partners or shareholders. Accurate journal entries and the preparation of final financial statements are crucial to reflect the true financial position upon wind-up. Asset sale proceeds versus book value determine gains or losses, influencing closing entries and final capital accounts (Penman, 2017).

In conclusion, mastering these accounting procedures involves understanding the principles behind each transaction, applying correct journal entries, and accurately preparing financial statement disclosures. Keeping detailed records ensures compliance with accounting standards and provides stakeholders with reliable financial information necessary for evaluating corporate health and making investment decisions.

References

• Arnold, G. (2019). Corporate Financial Reporting and Analysis. McGraw-Hill Education.
• Higgins, R. C. (2018). Analysis for Financial Management. McGraw-Hill Education.
• Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2019). Intermediate Accounting. Wiley.
• Nobes, C., & Parker, R. (2018). Financial Accounting and Reporting. Pearson.
• Penman, S. H. (2017). Financial Statement Analysis and Security Valuation. McGraw-Hill Education.
• Corporate Finance. McGraw-Hill Education.
• Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2020). Financial Accounting. Wiley.