XYTECH, INC.
20X0
A.
DB
300,000.00
A&CL
Able, Capital
Baker, Capital
Cabot, Capital
B.
A&CL
100,000.00
Long-term Debt
C.
Able, Capital
Baker, Capital
18,000.00
18,000.00
Cabot, Capital
18,000.00
A&CL
20X1
A.
A&CL
50,000.00
A&CL
B.
Baker, Capital
82,000.00
Able, Capital
Cabot, Capital
C.
A&CL
12,000.00
Able, Capital
Cabot, Capital
20X2
A.
Able, Capital
Cabot, Capital
129,000.00
129,000.00
Common Stock
Additional Paid in Capital
---OR---
A&CL
258,000.00
Common Stock
Additional Paid in Capital
B.
A&CL
5,000.00
Long-term Debt
C.
A&CL
26,000.00
Retained Earnings
20X3
A.
A&CL
43,000.00
Retained Earnings
B.
Able and Cabot each own 50,000 shares after the stock split.
20X4
A.
A&CL
720,000.00
Common Stock
Additional Paid in Capital
---OR---
A&CL
Stock Issue Cost/ Expense
720,000.00
55,000.00
Common Stock
Additional Paid in Capital
B.
A&CL
68,000.00
Retained Earnings
20X5
A.
A&CL
500,000.00
Bonds Payable
B.
Long-term Debt
150,000.00
A&CL
C.
A&CL
85,000.00
Retained Earnings
20X6
A.
A&CL
111,000.00
Retained Earnings
B.
Retained Earnings
30,000.00
A&CL - Dividends Payable
20X7
A.
Treasury Stock
200,000.00
A&CL
B.
A&CL
152,000.00
Retained Earnings
C.
Retained Earnings
36,000.00
A&CL - Dividends Payable
CR
100,000.00
100,000.00
100,000.00
Non Current Liabili
100,000.00
Long-term Debt
Able, Capital
Baker, Capital
Cabot, Capital
54,000.00
CAPITAL
Non Current Liabili
No effect. Loan is a Current Liability
50,000.00
Long-term Debt
41,000.00
Able, Capital
41,000.00
Cabot, Capital
There are only 2 partners left.
CAPITAL
6,000.00
6,000.00
10,000.00
248,000.00
Partnership's action is to become a Corporation
The partnership incorporates itself into a corporation.
Partnership disappears
100 shares @ $100
The partners set up a new corporation.
10,000.00
248,000.00
The partners incorporate the corporation.
The action of the partners.
The company receives the ASSETS and the LIABILITIES
50,000.00
26,000.00
If there are RETAINED EARNINGS in the BS, it is a CORPORATION
43,000.00
New Par Value of the Stock Split
$100/1,000=$0.10
The earnings per share is therefore $0.43
$43,000 / 100,000 shares = $0.43
10,000.00
710,000.00
100k new shares x 0.10 par value
100,000 shares @ $0.10
Bankers made money
10,000.00
765,000.00
68,000.00
500,000.00
150,000.00
85,000.00
EPS = 0.425
Non Current Liability and Owner's Equity
111,000.00
Bonds Payable
30,000.00
Common Stock
Additional Paid in Capital
Retained Earnings
CAPITAL
EPS
Treasury stock is a buy-back
200,000.00
Non Current Liability and Owner's Equity
152,000.00
Bonds Payable
36,000.00
(180,000 x $0.20)
Common Stock
Additional Paid in Capital
Treasury Stock
RE
CAPITAL
EPS
Non Current Liability and Owner's Equity
100,000
82,000
82,000
82,000
246,000
Non Current Liability and Owner's Equity
100,000
129,000
129,000
258,000
Non Current Liability and Owner's Equity
Long-term Debt
Common Stock
Additional Paid in Capital
Retained Earnings
CAPITAL
150,000
10,000
248,000
26,000
284,000
Non Current Liability and Owner's Equity
Long-term Debt
150,000
Common Stock
Additional Paid in Capital
Retained Earnings
10,000
248,000
26,000
CAPITAL
327,000
EPS
$ 0.43
Non Current Liability and Owner's Equity
Long-term Debt
150,000
Common Stock
Additional Paid in Capital
Retained Earnings
20,000
958,000
137,000
CAPITAL
1,115,000
EPS
d Owner's Equity
$ 0.340
No. of Shares
Par Value
500,000
20,000
958,000
200,000
$0.1
303,000
1,281,000
$ 0.555
d Owner's Equity
(111,000) / 200,000
No. of Shares
Par Value
500,000
20,000
958,000
-200,000
180,000
(net of TREASURY STOCK of 20,000)
419,000
1,197,000
Based on WEIGHTED AVERAGE
$ 0.800
Shares of 190,000
$ 0.844 THIS IS THE ACTUAL VALUE
Theoretically, this is more sound. But in Accounting,
the $0.800 is more viable.
No. of Shares
100
Par Value
$100.00
No. of Shares
200,000
Par Value
$0.1
