Page 556 - Accounting Principles (A Business Perspective)

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b. Why would the officers not merely declare a USD 4 million cash dividend? Is the proposed treasury stock
transaction fair to the other stockholders?
c. If you were one of the officers, would you feel comfortable in going ahead with this proposed treasury stock

transaction?
Group project E In teams of two to three students, go to the library to find articles evaluating accounting
software packages. Use a periodicals index such as the Accounting and Tax Index or the Business Periodicals Index
to locate these articles. Compare the cost and features of three accounting software packages. As a team, prepare a
memorandum to the manager of a small retail business. Compare and contrast the three accounting software
packages so the manager might decide which package to purchase. In the memorandum, cite the sources used in
gathering the data and properly reference any direct quotes or paraphrasing. The heading of the memorandum

should contain the date, to whom it is written, from whom, and the subject matter.
Group project F With a small group of students, go to the library and locate Statement of Financial
Accounting Standards No. 4, "Reporting Gains and Losses from Extinguishing of Debt", published by the Financial
Accounting Standards Board. Write a report to your instructor giving the highlights of the standard. Why are these
gains and losses treated as extraordinary items? Why did the Board act on this topic? Why did one member of the
Board dissent?
Group project G With one or two other students, locate the annual reports of three companies and study their
statements of stockholders' equity. Determine why the number of common shares outstanding changed (if at all)
during the current year. For instance, the number of outstanding shares may have increased due to new issuances,

exercise of stock options, conversion of preferred stock, exercise of warrants, stock dividends, and other causes. The
number of shares outstanding may have decreased because of repurchases of stock (treasury stock transactions).
Write a report to your instructor presenting your findings. Also be prepared to make a short presentation to your
class.

Using the Internet—A view of the real world
Visit the following website for the General Electric Company:
http://www.ge.com
Pursue choices on the screen until you locate the consolidated statement of changes in stockholders' equity. You
will probably go down some "false paths" to get to this financial statement, but you can get there. This experience is
all part of learning to use the Internet. Trace the changes that have occurred in the last three years in the dividends
and other transactions with stockholders. Check out the notes to the financial statements for further information.
Write a memo to your instructor summarizing your findings.
Visit the following website for 3M:

http://www.3m.com
Pursue choices on the screen until you locate the Financial Section. You will probably go down some "false
paths" to get to this information, but you can get there. This experience is all part of learning to use the Internet.
Trace the changes that have occurred in the stockholders' equity section for the most recent two years. Identify the
causes of the changes. Check out the notes to the financial statements for further information. Write a memo to
your instructor summarizing your findings.

Accounting Principles: A Business Perspective 557 A Global Text