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About this document
- Pages
- 12 pages
- Price
- $12 one-time, yours to keep
- Membership
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- Format
- Subject
- Accounting, Finance
This assignment covers several accounting exercises including journal entries, profitability ratios, and stock plans. It helps students practice accounting principles and financial reporting.
What's inside
- Transactions affecting retained earnings
- Profitability ratio calculation
- Restricted stock award plan
- Stock options
- Employee share purchase plan
- Earnings per share terminology
Who it is for: Students taking an accounting course. (Undergraduate)
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Summary
Accounting exercises cover journal entries, financial ratios and stock plans. Students work through examples to understand and practice these accounting tasks.
Journal Entries for Retained Earnings
Transactions affecting retained earnings are shown in T-account format. Students recreate the journal entries for these transactions. A statement of retained earnings for the year is prepared.
Profitability Ratio Calculation
The return on shareholders’ equity is calculated using net income and average shareholders' equity. The ratio's meaning is explained. The calculation is done for a company.
Stock Plans and Compensation Expense
Stock plans include restricted stock and stock options. Compensation expense is recorded over time. Journal entries are prepared for these transactions.
Employee Share Purchase Plan
Employees buy shares directly from the company at a discount. The journal entry to record these purchases is prepared.
Key terms
- Retained earnings
- The part of net income that is kept by the company rather than paid out as dividends.
- Return on shareholders' equity
- A profitability ratio that measures net income relative to shareholders' equity.
- Restricted stock
- Stock that is subject to certain restrictions, such as a vesting period.
- Stock options
- The right to buy shares at a specified price within a certain time period.
- Employee share purchase plan
- A plan that allows employees to buy shares directly from the company.
- Compensation expense
- The cost of employee compensation, including stock-based compensation.
Questions this document helps with
- What journal entries are needed for transactions affecting retained earnings?
- How is the return on shareholders' equity calculated?
- What is the journal entry for an employee share purchase plan?
Summary written with AI from the document's text.
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