6 On January 1, 2010, Gerlach had the following account balances in its shareholders' equity accounts Preferred stock is non cumulative, and carries 6 dividend rate During 2010, Gerlach Inc had several transactions relating to common stock January 15 Declared a cash dividend of $200,000 to common stockholders after meeting the required 2010 dividend on preferred stock for the year February 17 Paid the cash dividend to both preferred stock and common stock April 10 Declared and distributed a 10 stock dividend on the outstanding common stock as of the date The market value per common share was $10 October 18 Declared a $0 80 special cash dividend per share on the outstanding common stock as of the date Assume net income is $800,000 for the year ended 12 31 2010 Required Calculate the ending balance of Stockholders equity after the above events have been recorded Do not provide journal entries in your solution instead prepare a table as shown below and enter the effect of each of the above transactions in the table under the appropriate columns If an item decreases the balance of an account, put a negative sign before the amount of the item in the table The total of each column in the end will provide you the stockholders equity amount (10 points) Transactions Preferred stock at par PIC in excess on Pref stock Common stock at par PIC in excess on Com stock Retained earnings Treasury stock at cost Jan 1 Balance 1,000,000 1,100,000 250,000 750,000 2,000,000 25,000 January 15 February 17 April 10 October 18 December 31 Dec 31 Balance 7 The following balance sheet information (in $ millions) comes from the Annual Report to Shareholders of Marriott International Inc for the 2006 fiscal year Certain amounts have been replaced with question marks to test your understanding of balance sheets In addition, you are provided with the following information from an analysis of Marriott's financial position at the same date Current ratio 1 3140364 Acid test ratio 0 519429 Debt to equity ratio 2 280367 Note Quick assets consist of Cash and equivalents, and Accounts and notes receivables in this example Compute the missing amounts (rounded to the nearest $ in millions) in the Marriott balance sheet 10 The following facts apply to TinyPart Toy Company's pending litigation as of December 31, 2011 a TinyPart is defending against a lawsuit and believes there is a 51 chance it will lose in court If they lose, TinyPart estimates that damages will be $100,000 b TinyPart is defending against another lawsuit for which management believes it is virtually certain to lose in court If it loses the lawsuit, management estimates damages will fall somewhere in the range of $30,000 $50,000, with each amount in that range equally likely to occur Required i Indicate how TinyPart would disclose or account for the lawsuit described in part (a) under IFRS in the financial statements for the year ended December 31, 2011 (2 points) ii Indicate how TinyPart would disclose or account for the lawsuit described in part (b) under under IFRS in the financial statements for the year ended December 31, 2011 (2 points) 6 On January 1, 2010, Gerlach had the following account balances in its shareholders' equity accounts Preferred stock is non cumulative, and carries 6 dividend rate During 2010, Gerlach Inc had several transactions relating to common stock January 15 Declared a cash dividend of $200,000 to common stockholders after meeting the required 2010 dividend on preferred stock for the year February 17 Paid the cash dividend to both preferred stock and common stock April 10 Declared and distributed a 10 stock dividend on the outstanding common stock as of the date The market value per common share was $10 October 18 Declared a $0 80 special cash dividend per share on the outstanding common stock as of the date Assume net income is $800,000 for the year ended 12 31 2010 Required Calculate the ending balance of Stockholders' equity after the above events have been recorded Do not provide journal entries in your solution instead prepare a table as shown below and enter the effect of each of the above transactions in the table under the appropriate columns If an item decreases the balance of an account, put a negative sign before the amount of the item in the table The total of each column in the end will provide you the stockholders' equity amount (10 points) Transactions Jan 1 Balance January 15 February 17 April 10 October 18 December 31 Dec 31 Balance Preferred PIC in excess stock at par on Pref stock 1,000,000 1,100,000 Common stock at par 250,000 PIC in excess on Com stock 750,000 Retained earnings Treasury stock at cost 2,000,000 25,000 7 The following balance sheet information (in $ millions) comes from the Annual Report to Shareholders of Marriott International Inc for the 2006 fiscal year Certain amounts have been replaced with question marks to test your understanding of balance sheets In addition, you are provided with the following information from an analysis of Marriott's financial position at the same date Current ratio 1 3140364 Acid test ratio 0 519429 Debt to equity ratio 2 280367 Note Quick assets consist of Cash and equivalents, and Accounts and notes receivables in this example Compute the missing amounts (rounded to the nearest $ in millions) in the Marriott balance sheet 10 The following facts apply to TinyPart Toy Company's pending litigation as of December 31, 2011 a TinyPart is defending against a lawsuit and believes there is a 51 chance it will lose in court If they lose, TinyPart estimates that damages will be $100,000 b TinyPart is defending against another lawsuit for which management believes it is virtually certain to lose in court If it loses the lawsuit, management estimates damages will fall somewhere in the range of $30,000 $50,000, with each amount in that range equally likely to occur Required i Indicate how TinyPart would disclose or account for the lawsuit described in part (a) under IFRS in the financial statements for the year ended December 31, 2011 (2 points) ii Indicate how TinyPart would disclose or account for the lawsuit described in part (b) under under IFRS in the financial statements for the year ended December 31, 2011 (2 points)

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6. On January 1, 2010, Gerlach had the following account balances in its shareholders' equity accounts. Preferred stock is non-cumulative, and carries 6% dividend rate.

6. On January 1, 2010, Gerlach had the following account balances in its shareholders' equity accounts. Preferred stock is non-cumulative, and carries 6% dividend rate. During 2010, Gerlach Inc. had several transactions relating to common stock. January 15: Declared a cash dividend of $200,000 to common stockholders after meeting the required 2010 dividend on preferred stock for the year. February 17: Paid the cash dividend to both preferred stock and common stock. April 10: Declared and distributed a 10% stock dividend on the outstanding common stock as of the date. The market value per common share was $10. October 18: Declared a $0.80 special cash dividend per share on the outstanding common stock as of the date. Assume net income is $800,000 for the year ended 12/31/2010. Required: Calculate the ending balance of Stockholders? equity after the above events have been recorded. Do not provide journal entries in your solution; instead prepare a table as shown below and enter the effect of each of the above transactions in the table under the appropriate columns. If an item decreases the balance of an account, put a negative sign before the amount of the item in the table. The total of each column in the end will provide you the stockholders? equity amount. (10 points) Transactions Preferred stock at par PIC in excess on Pref stock Common stock at par PIC in excess on Com stock Retained earnings Treasury stock at cost Jan 1 Balance 1,000,000 1,100,000 250,000 750,000 2,000,000 25,000 January 15 February 17 April 10 October 18 December 31 Dec 31 Balance 7. The following balance sheet information (in $ millions) comes from the Annual Report to Shareholders of Marriott International Inc. for the 2006 fiscal year. Certain amounts have been replaced with question marks to test your understanding of balance sheets. In addition, you are provided with the following information from an analysis of Marriott's financial position at the same date: Current ratio = 1.3140364; Acid-test ratio = 0.519429; Debt-to-equity ratio = 2.280367. Note: Quick assets consist of Cash and equivalents, and Accounts and notes receivables in this example. Compute the missing amounts (rounded to the nearest $ in millions) in the Marriott balance sheet. 10. The following facts apply to TinyPart Toy Company's pending litigation as of December 31, 2011: a. TinyPart is defending against a lawsuit and believes there is a 51% chance it will lose in court. If they lose, TinyPart estimates that damages will be $100,000. b. TinyPart is defending against another lawsuit for which management believes it is virtually certain to lose in court. If it loses the lawsuit, management estimates damages will fall somewhere in the range of $30,000 - $50,000, with each amount in that range equally likely to occur. Required: i. Indicate how TinyPart would disclose or account for the lawsuit described in part (a) under IFRS in the financial statements for the year ended December 31, 2011. (2 points) ii. Indicate how TinyPart would disclose or account for the lawsuit described in part (b) under under IFRS in the financial statements for the year ended December 31, 2011. (2 points) image text in transcribed

6. On January 1, 2010, Gerlach had the following account balances in its shareholders' equity accounts. Preferred stock is non-cumulative, and carries 6% dividend rate. During 2010, Gerlach Inc. had several transactions relating to common stock. January 15: Declared a cash dividend of $200,000 to common stockholders after meeting the required 2010 dividend on preferred stock for the year. February 17: Paid the cash dividend to both preferred stock and common stock. April 10: Declared and distributed a 10% stock dividend on the outstanding common stock as of the date. The market value per common share was $10. October 18: Declared a $0.80 special cash dividend per share on the outstanding common stock as of the date. Assume net income is $800,000 for the year ended 12/31/2010. Required: Calculate the ending balance of Stockholders' equity after the above events have been recorded. Do not provide journal entries in your solution; instead prepare a table as shown below and enter the effect of each of the above transactions in the table under the appropriate columns. If an item decreases the balance of an account, put a negative sign before the amount of the item in the table. The total of each column in the end will provide you the stockholders' equity amount. (10 points) Transactions Jan 1 Balance January 15 February 17 April 10 October 18 December 31 Dec 31 Balance Preferred PIC in excess stock at par on Pref stock 1,000,000 1,100,000 Common stock at par 250,000 PIC in excess on Com stock 750,000 Retained earnings Treasury stock at cost 2,000,000 25,000 7. The following balance sheet information (in $ millions) comes from the Annual Report to Shareholders of Marriott International Inc. for the 2006 fiscal year. Certain amounts have been replaced with question marks to test your understanding of balance sheets. In addition, you are provided with the following information from an analysis of Marriott's financial position at the same date: Current ratio = 1.3140364; Acid-test ratio = 0.519429; Debt-to-equity ratio = 2.280367. Note: Quick assets consist of Cash and equivalents, and Accounts and notes receivables in this example. Compute the missing amounts (rounded to the nearest $ in millions) in the Marriott balance sheet. 10. The following facts apply to TinyPart Toy Company's pending litigation as of December 31, 2011: a. TinyPart is defending against a lawsuit and believes there is a 51% chance it will lose in court. If they lose, TinyPart estimates that damages will be $100,000. b. TinyPart is defending against another lawsuit for which management believes it is virtually certain to lose in court. If it loses the lawsuit, management estimates damages will fall somewhere in the range of $30,000 - $50,000, with each amount in that range equally likely to occur. Required: i. Indicate how TinyPart would disclose or account for the lawsuit described in part (a) under IFRS in the financial statements for the year ended December 31, 2011. (2 points) ii. Indicate how TinyPart would disclose or account for the lawsuit described in part (b) under under IFRS in the financial statements for the year ended December 31, 2011. (2 points)