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Accounting math problems

Our company issued shares of common stock for services we received. To record this, Jack is 100% sure we need to use historical cost of the consideration. Yolanda thinks it would be the consideration’s fair market value. And Tony believes we can use either one, historical cost or fair value as long as we are consistent with this sort of transaction.

Who’s right on this and why? Explain your answer.

)Our company did a stock dividend. Dave says there is no effect on our comprehensive stockholders’ equity at all. Barbara disagrees and says it does have an effect on equity but isn’t sure exactly what. She just knows there is an impact. Verna has absolutely no clue on this one. So she just cannot decide who’s right and is completely lost.

Exactly what effect(s) would there be on the comprehensive stockholders’ equity? Make sure you explain why.

Last Updated on February 11, 2019

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