会计 英文版 十四单元 答案Word格式.docx

会计 英文版 十四单元 答案Word格式.docx

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Questions

Brief

Exercises

Problems

1.Identifythemajorcharacteristicsofacompany.

1,2,3,4,9

1

2.Differentiatebetweensharecapitalandretainedearnings.

5,6,8,10,

11,14,15

2

3A,4A

3.Recordtheissueofordinaryshares.

7,11,12,13

3,4,5,6

1,2,3,4,5,6

1A,2A,3A,4A,6A,7A

4.Explaintheaccountingforsharebuy-backs.

15,16

7

2,4,6,8

6A

5.Differentiatepreferencesharesfromordinaryshares.

17

4,8

3,5,8

1A,4A,6A,7A

6.Prepareashareholders’equitysection.

20

9

2,7,8,9,

10,11

1A,2A,3A,

4A,5A,6A,7A

7.Computebookvaluepershare.

18,19

10

12,13

ASSIGNMENTCHARACTERISTICSTABLE

Problem

Number

Description

Difficulty

Level

Time

Allotted（min.）

Journalisesharestransactions,post,andpreparesharecapitalsection.

Simple

30-40

Journalisesharetransactions,andprepareshareholders’equitysection.

Moderate

3

Journaliseandposttransactions,andpreparethe

shareholders’equitysection.

4

Journaliseandpostordinaryandpreferencesharetransactions,andprepareshareholders’equitysection.

5

Prepareshareholders’equitysection.

20-30

6

Prepareentriesforsharetransactionsandprepareshareholders’equitysection.

Journalisesharetransactionsandpreparesharecapitalsection.

40-50

BLOOM’STAXONOMYTABLE

CorrelationChartbetweenBloom’sTaxonomy,LearningObjectivesandEnd-of-ChapterExercises

andProblems

LearningObjective

Knowledge

Comprehension

Application

Analysis

Synthesis

Evaluation

Q14-4

BE14-1

Q14-1

Q14-2

Q14-3

Q14-9

Q14-5

Q14-6

Q14-8

Q14-10

Q14-11

Q14-14

Q14-15

BE14-2

P14-3

P14-4

Q14-12

Q14-13

Q14-7

BE14-3

BE14-4

BE14-5

BE14-6

E14-1

E14-2

E14-3

E14-5

E14-6

P14-1

P14-2

P14-6

Q14-16

E14-8

BE14-7

Q14-17

BE14-8

P14-7

Q14-20

E14-10

E14-11

BE14-9

E14-7

E14-9

P14-5

Q14-18

Q14-19

BE14-10

E14-12

E14-13

BroadeningYourPerspective

InterpretingFinancialStatements

GroupDecision

ExploringtheWeb

FinancialReporting

ComparativeAnalysis

Communication

EthicsCase

ANSWERSTOQUESTIONS

1.（a）Separatelegalentity.Acompanyisseparateanddistinctfromitsownersanditactsinitsownnameratherthaninthenameofitsshareholders.Incontrasttoapartnership,theactsoftheowners（shareholders）donotbindthecompanyunlesstheownersaredulyappointedagentsofthecompany.

（b）Limitedliabilityofshareholders.Becauseofitsseparatelegalexistence,creditorsofacompanyordinarilyhaverecourseonlytocompanyassetstosatisfytheirclaims.Thus,theliabilityofshareholdersisnormallylimitedtotheirinvestmentinthecompany.

（c）Transferableownershiprights.Ownershipofacompanyisheldinshares.Thesharesaretransferableunits.Shareholdersmaydisposeofpartoralloftheirinterestbysimplysellingtheirshares.Thetransferofownershiptoanotherpartyisentirelyatthediscretionoftheshareholder.

2.（a）Theseparationofownershipandmanagementisanadvantagetoacompanybecauseitcanhireprofessionalmanagerstorunthecompany.Itisalsoadisadvantagetoacompanybecauseitpreventsownersfromhavinganactiveroleindirectlymanagingthecompany.

（b）Twootherdisadvantagesofacompanyformofownershiparegovernmentregulationsandcompanytaxation.Acompanyissubjecttonumerousregulations.Companiesmustpayincometaxes.Thesetaxesaresubstantial.Publiclyownedcompaniesarealsorequiredtomakeadequatedisclosuresoftheirfinancialaffairs.

3.（a）

（1）Thearticlesofincorporationisadocumentthatcreatesacompany.

（2）Thecompanyconstitutionistheinternalrulesandproceduresforconductingtheaffairsofacompany.Theyalsoindicatethepowersoftheshareholders,directorsandseniorexecutives.

（3）Preliminaryexpensesarecostsincurredintheformationofacompany.Thesecostsincludelegalfeesandpromotionalexpenditureinvolvedintheorganisationofthebusiness.Preliminarycostsarecapitalisedasitwouldbeexpectedthatthesecostswillprovidefutureeconomicbenefitstothecompany.

4.Intheabsenceofrestrictiveprovisions,thebasicownershiprightsofordinaryshareholdersaretherightsto:

（1）voteintheelectionofaboardofdirectorsandincompanyactionsthatrequireshareholders’approval.

（2）shareincompanyprofitsthroughthereceiptofdividends.

（3）keepthesamepercentageownershipwhennewsharesofordinarysharesareissued（thepreemptiveright）.

（4）shareinassetsuponliquidation.

5.（a）Thetwoprincipalcomponentsofshareholders’equityforacompanyaresharecapital（theinvestmentofcashandotherassetsinthecompanybyshareholdersinexchangeforshares）andretainedearnings.Theprincipalsourceofretainedearningsisprofit.

（b）Sharecapitalisthetermusedtodescribethetotalamountpaid-uponshares.Sharecapitalmayresultthroughtheissueofordinarysharesand/orpreferenceshares.

6.Eachofthethreebasicfinancialstatementsforacompanydiffersfromthoseforaproprietorship.Theincomestatementforacompanywillhaveincometaxexpense.Foracompany,aretainedearningsstatementispreparedtoshowthechangesinretainedearningsduringtheperiod.Inthestatementoffinancialposition,theowner’sequitysectioniscalledtheshareholders’equitysection.

AnswerstoQuestions（continued）

7.Shareholders’Equity

ShareCapital

100000ordinaryshares,fullypaid500000

50000ordinaryshares,paidto$4200000

TotalShareCapital700000

RetainedEarnings44000

TotalShareholders’Equity$744000

8.Parvalueisanarbitraryamountassignedtoeachshare.Theshareissuepriceisthepricerequiredtobepaidinordertopurchasetheshares.CountrieslikeAustraliaandNewZealandhaveremovedtheuseofparvaluebecauseparvalueisanimmaterialvalueinrelationtotheissuepricewithnorelationshipwiththemarketvalueoftheshareissued.

9.Amongthefactorswhichinfluencethemarketvalueofsharesarethecompany’sprofitsandanticipatedfutureearnings,itsexpecteddividendratepershare,itscurrentfinancialposition,thecurrentstateoftheeconomy,andthecurrentstateofthesharemarkets.

10.Whenacompanyissueshares,cashisreceivedbythecompanyandthesharecapitalaccountiscreditedwiththeamountofsharesissued,thereforeincreasingsharecapital.Thisisverydifferenttostockexchangetransactionswhereoneshareholdersellssomeoralloftheirsharestoanothershareholderorinvestor.Thesetypeoftransactions,knownasstockexchangetransactions,arenotrecordedbythecompanyandthereforesharecapitalremainsthesame.Inthesetransactions,thecompanysimplyrecordsthechangeinownershipofthosesharesoftenviatheshareregistryservice.

11.WhentheboardofdirectorsofUnforgettableHouseboatsLtdmakesthecalltheshareholdersareobligedtopaytheamountcalled.Whensharesareallotted,alegallybindingcontractiscreated,thereforeshareholdersarerequiredtopaytheamountowingasandwhenrequired.Theamountpersharerequiredtobepaidis$2pershare.

12.Ifashareholderfailstopayacallonasharethecompanycandooneoftwothings:

（a）takelegalactionagainsttheshareholdertoensurethemoneyispaid;

or,

（b）forfeittheshares.Ifthesharesareforfeited,theshareholderwhoownedtheshareslosesanyamountpaidtothecompanyandisnolongerashareholderofthecompany.

13.Whensharesareissuedforservicesornon-cashassets,thecostshouldbemeasuredatthefairvalueoftheconsiderationgivenup（inthiscase,theshares）.Thefairvalueofthesharesisobjectivelydeterminablethanthatoftheland,sincethesharesareactivelytradedonthestockexchange.Therefore,thelandshouldberecordedat$90 

000.

14.Acompanymayrepurchaseitsownsharesforoneofthefollowingreasons:

1.Thecompanyhassurpluscash,anditdoesnothaveorisnotawareofasufficientprofitableinvestmentopportunity.

2.Managementmaywanttoavoidatakeoverofthecompanybyanoutsideparty.

3.Thebuybackofsharesmaysupporttheshares’marketpricebydecreasingthenumberofsharesavailable.

4.Managementmaybemakingafinancingdecision,thatis,itmaywishtoreplacesomeofthecompany’ssharecapitalwithborrowedfunds.

15.Whenacompanybuysbackitsshar