Propertee, Inc

question 93

Essay

Propertee, Inc.declared a dividend on May 1 payable in shares of Milly, Inc.(original cost: $4 per share, acquired at the beginning of the current year)to Propertee shareholders of record on June 1.The payment date is July 1.The dividend requires 20,000 shares of Milly to be distributed.Market prices of Milly/share were: May 1: $6; June 1: $8; July 1: $9.Provide the entry at declaration of the dividend.

Understand the classification and reporting of cash flows from investing and financing activities.

Apply the indirect method to calculate cash flows from operating activities given changes in current assets and liabilities.

Understand the direct method of reporting cash flows from operating activities, including calculations involving cash payments for merchandise and cash collections from customers.

Identify the effects of changes in accounts receivable, accounts payable, and inventory on cash flows from operating activities.

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Definitions:

Proxies

Proxies are documents authorizing a person to vote on another shareholder's behalf during a company's shareholder meeting.

Takeover

The acquisition of one company by another, in which the acquiring company obtains majority control over the targeted firm.

Acquired Firm's Management

The executive and leadership team of a company that has been acquired by another entity.

Mergers

The combination of two or more companies into one, with the goal of achieving synergies such as cost reductions and increased market share.