1. How should Cloudy Day present the preferred stock issued to Well-to-Do Inc. on the balance sheet?
2. How should Cloudy Day value the common stock repurchased from employees?
3. How should Cloudy Day account for the reissuance of the treasury stock to Well-to-Do Inc.?
4. How should Cloudy Day report the stock transactions related to the agreement with Well-to-Do, Inc. on the cash flows statement?
please ALSO PROVIDE ASC CODE FOR EACH QUESTION
How should Cloudy Day report the stock transactions related to the agreement with Well-to-Do, Inc. on the cash flows statement
1. Cloudy day presents the preferred stock under the term stockholder's equity in the balance sheet on the liabilities side under the head capital. This denotes the amount of contribution made by the equity shareholders with the preferred stock.
2. Common stock repurchased from the employees is treated as employee compensation as cloudy day repurchased the shares is a greater value than its fair value of shares. In this case, the entity repurchased the shares 20% higher than the earlier value of the shares.
3.
Cash a/c (250000 shares @$12) $30,00,000
Paid in capital a/c($30,00,0000-$10,00,000) $20,00,000
To treasury stock $50,00,0000
(Bering reissue of the shares by cloudy day)
4. Cloudy day records the stock related transactions in the Investing activities in the cash flow statements by adding the amount of reissue.
1. How should Cloudy Day present the preferred stock issued to Well-to-Do Inc. on the balance...
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