User Account

All Pages

How should target inc account for the purchase

Assignment Help Financial Accounting
Reference no: EM133105190

FASB Codification Case - Treasury Stock - Facts - Target Inc. arranged to purchase a large block of its common stock from a major shareholder.

The total number of shares purchased is 10,000 and these shares are to be held as treasury shares.

Target Inc. uses the cost method to account for treasury shares.

This shareholder had a controlling interest before the transaction. After the transaction this shareholder no longer has a controlling interest. Given these facts, to induce the shareholder to sell the block of stock Target Inc. was forced to pay an amount in excess of the current market price of the stock. Target Inc. paid the shareholder $40 per share when the market price was $30 per share.

Question - How should Target Inc. account for the purchase of this treasury stock?

Required -

1. Provide a brief written description of the proper accounting treatment, including how the extra $10 paid per share is recorded.

2. Prepare a formal journal entry to record the treasury stock transaction.

3. Identify the specific paragraph of the FASB Codification which addresses this issue and submit a printout of this paragraph with your solution.

Reference no: EM133105190

Questions Cloud

Which would be the least expensive mode of travel : The same trip by bus will take three hours and cost $75.00 round trip. Which would be the least expensive mode of travel for an attorney
Norm thompson outfitters : Based on what you have read about Norm Thompson from our textbook, together with your research https://en.wikipedia.org/wiki/Norm_Thompson_Outfitters and https:
The as-a-service revolution : "As-a-service" - the provision of services that we need to live and work through cloud-based, on-demand platforms - is the key that has put the other tech trend
Develop and name the type of measuring instrument : Develop and name the type of measuring instrument you would use to tap the following:
How should target inc account for the purchase : Target Inc. uses the cost method to account for treasury shares. How should Target Inc. account for the purchase of this treasury stock
Explain the different ways that the data science team : Explain the different ways that the data science team at Nutri Mondo could deploy what they have found in the data?
Implementation of pow subroutine : Parameter passing and local variables - Write a subroutine that takes several input parameters and returns a computed value
What was the amount of the original loan that you took : When you purchased your house, you took out a 30-year annual-payment mortgage with an interest rate of 6% per year. What was the amount of the original loan
How much would you have to fund this perpetuity : Given an interest rate of 5%, how much would you have to fund this perpetuity to guarantee the charity a payment of $50,000 per year

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd