This item is a free, online textbook from BookBoon.com that includes 8 problems, worksheets, and solutions involving shareholders' equity and liabilities. A registration is required to access the materials.
Type of Material:
Open Textbook for drill and practice.
Homework or in-class demonstration problems.
Must provide email to download the book.
Identify Major Learning Goals:
To gain a better understanding of the concepts and procedures relating to issuance of stock, cash and stock dividends, stock splits, treasury stock, the statement of changes in owners’ equity, and various financing scenarios.
Target Student Population:
Introductory, upper level college or graduate financial accounting and finance courses.
Prerequisite Knowledge or Skills:
Knowledge of the fundamental accounting equation, stockholder equity transactions, related calculations, and financial statement presentation.
The module provides demonstrations of various concepts that are core concepts in the discipline. Concepts covered involve paid-in-capital and dividends for common and preferred stock. Content is current and relevant. The problems summarize and integrate the concepts well.
A few mistakes exist in the solution to Problems 2, 4, 5, 6, and 8. Most, if not all, of these mistakes are simply carelessness on the part of the author.
In problem #2, the 2007 net income is listed as $1,250,000, but the solution to parts (b) and (c) are based on a 2007 net income of $1,250,000.
In Problem 4, only $1,500,000 should be debited to Paid in Capital Treasury Stock and the rest of the deficiency should be debited to Retained Earnings.
In Problem 5, separate entries should be made on the date of declaration and date of distribution. Consider using the same % dividend for preferred cumulative and noncumulative.
In Problem 6, the paid in capital in excess of par for 6,000,000 shares of .50 par value common stock issued at $6 is $33,000,000, not $30,000,000 as the solution indicates.
Potential Effectiveness as a Teaching Tool
The textbook provides a good variety of problem sets to support learning the desired concepts. The module demonstrates relationships between concepts, is easy to write assignments for, and is efficient.
Learning objectives for each problem could be more specifically stated, prerequisite knowledge could be identified with concepts reinforced progressively and built on prior concepts more explicitly. In Canada, very few corporations issue par value common shares. The errors in the problems identified under Content Quality require correction prior to having students do them.
Ease of Use for Both Students and Faculty
The module is easy to use, has clear instructions, and is somewhat engaging. A nice feature is having templates to be completed for some of the parts of some problem sets.
The module could be more visually appealing, interactive, and of higher design quality. For example, using a larger font size is suggested. The table of contents does not describe the nature of each problem that follows, but lists them merely as Problem 1, Problem 2, etc. For example, by naming Problem 1 as Journal Entries - Issuing stock would be more meaningful. Finally, this material should only be assigned and/or collected once the concepts have been presented in class. As a result, the set of problems are not really standalone, but supplemental to instruction on the various topics. Advertisements are interspersed among the problems.
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