Problem 18–6
Requirement 1
2018 ($ in millions)
Cash……………………………………………………………………………. 480
Preferred stock (1 million shares x $10 par per share)…………… 10
Paid-in capital—excess of par, preferred……………………… 470
Cash……………………………………………………………………………. 70
2019 ($ in millions)
Common stock (3 million shares x $1 par)……………………………. 3
= $9 weighted average amount per share in excess of par
Problem 18–6 (continued)
($ in millions)
Retained earnings…………………………………………………………. 1
Cash dividends payable, preferred …………………………….. 1
Cash dividends payable, preferred …………………………………. 1
Cash ……………………………………………………………………….. 1
2020 ($ in millions)
Retained earnings ………………………………………………………… 65
Common stock …………………………………………………………. 6
Paid-in capital—excess of par, common………………………. 59
Retained earnings…………………………………………………………. 1
Problem 18–6 (concluded)
Requirement 2
ANACONDA INTERNATIONAL CORPORATION
Balance Sheets
at December 31
2020 2019
Shareholders’ Equity:
Preferred stock $ 15 $ 15
Common stock 65 59
Problem 18–7
Requirement 1
The statement of shareholders’ equity explains why and how the various
shareholders’ equity items in the balance sheet change from period to period. The
Requirement 2
Cisco accounts for its share repurchases by formally retiring them. The
Requirement 3
The price Cisco paid for the shares repurchased during the period shown was
more than the average price at which Cisco had sold the shares previously. We
($ in
millions)
Common stock (93,000,000 shares x $.001 par per share). . . 1
*consisting of Paid-in capital—excess of par (shares x paid-in per share in excess
Problem 18–7 (continued)
Requirement 4
Comprehensive income is the total nonowner change in equity for a reporting
period. It encompasses all changes in equity other than from transactions with
Requirement 5
The change in Comprehensive income in the period presented was due to (1)
net income ($5,577 million) and other comprehensive income (OCI) ($868
million). OCI consists of some unreported combination of (1) net unrealized
For reporting purposes, some investments in debt securities are
reported at their fair values. The holding gains and losses from
When a derivative designated as a cash flow hedge is adjusted
to fair value, the gain or loss is deferred as a component of
Problem 18–7 (concluded)
As we noted in Chapter 17, gains and losses, and prior service cost
Adjustments from changes in foreign currency exchange rates when
The comprehensive income accumulated over the current and prior periods is
reported as a separate component of shareholders’ equity. In Cisco’s case, this
Problem 18–8
Requirement 1
Cash ($385,000 – 1,500)…………………………………………………. 383,500
Requirement 2
Requirement 3
Requirement 4
Common stock (10% x $30,000)……………………………………… 3,000
Problem 18–9
Assumption A – noncumulative
Preferred Common
Total $150
Assumption B – cumulative
Preferred Common
Total $150
Dividends in arrears:
-2017 $10 (10% x $100) (10)
Problem 18–10
Transactions
N 1. Sale of common stock
N 2. Purchase of treasury stock at a cost less than the original issue
price
N 3. Purchase of treasury stock at a cost greater than the original issue
price
* Shareholders’ equity of the transacting company includes only common stock, paid-in
capital—excess of par, and retained earnings at the time of each transaction. No
Paid-in capital—share repurchase.