During 2014, Pine Corporation Had the Following Transactions and Events

question 224

Essay

During 2014, Pine Corporation had the following transactions and events:
1. Issued par value preference shares for cash at par value.
2. Issued par value ordinary shares for cash at an amount greater than par value.
3. Completed a 2 for 1 share split in which the $10 par value ordinary shares were changed to $5 par value shares.
4. Declared a small share dividend when the market value was higher than the par value.
5. Declared a cash dividend.
6. Made a prior period adjustment for understatement of net income.
7. Issued par value ordinary shares for cash at par value.
8. Paid the cash dividend.
9. Issued the ordinary shares required by the share dividend declaration in 4. above.
Instructions
Indicate the effect(s) of each of the foregoing items on the subdivisions of equity. Present your answers in tabular form with the following columns. Use (I) for increase, (D) for decrease, and (NE) for no effect.

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used to evaluate its financial health.

Salvage Value

The approximated value of an asset at the close of its functional life.

Useful Life

The estimated duration of time that an asset is expected to be operational and economically viable.

Units-Of-Activity

A depreciation method where the expense is based on the actual usage or activity of the asset rather than the passage of time.