Business Administration 2257 Study Guide - Midterm Guide: Common Stock, Dividend, Retained Earnings
9 Apr 2015
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Document Summary
The purpose of this case is to give you more practice dealing with equity transactions. This tutorial will help you determine how to account for each of the equity transactions outlined in the case. If you have any questions, email your instructor. You can also check the tutorial 9 faq page at the end of this tutorial for more information that may help you. Before we can begin dealing with the transactions, we need to get the balances in our equity accounts from the fairmont properties limited (a) case. Your super-t should look like this to start the case. On january 9, the board of directors decided to split the common stock 3:1 to make the stock easier to purchase. The common share to preferred share ratio was adjusted to 9:1. No actual money changes hands in this transaction, so there is no entry on our t-accounts. It is important, however, for us to update the number of shares outstanding.
