C521: Stockholders’ Equity - SWM - Mini Case Study - Managerial Accounting Assignment Help

Assignment Task:

Please review the class notes for Module 6 prior to beginning this mini case.

The purpose of this mini case is to provide you with a deeper understanding of stockholders’ equity.You will continue using the company you selected for mini case 1. Please submit your mini case on Canvas and include your company’s name on the document that you submit.

Required:

1. Briefly discuss the impact of any accounting recent accounting pronouncements related to stockholders’ equity accounts. You can find this information in the footnotes (e.g., Recent Accounting Pronouncements).

2. Review the Management Discussion and Analysis (MD&A) section and briefly note any discussion related to stockholders’ equity accounts.

“We have declared and paid cash dividends on our common stock every fiscal quarter since the second quarter of 1996.On February 20, 2020, we announced a cash dividend of $0.44 per share payable on March 20, 2020 to stockholdersof record as of the close of business on March 4, 2020.”

“In 2019, 2018, and 2017, we repurchased 25,297 shares 75,395 shares, and 25,860 shares, respectively, of our common stock at a cost of$0.9 million, $3.0 million, and $1.2 million, respectively, for the value of employees' stock-based compensation share awardssurrendered to satisfy their personal statutory income tax withholding obligations.”

3. List each account and amount in stockholders’ equity for the past three years and briefly comment on any unusual items or balances.

4. Did your company issue stock during the past three years?
a. If so, how many shares were issued and how much cash was received?

SWM issued common shares (net) in 2019 and 2017, as reflected in the changes in the number of shares outstanding and Additional paid-in capital account. However, since the dollar value of common stock did not change, SWM did not issue shares for cash. Instead, SWM issued shares as compensation to directors and employees. Note that the small decrease in the number of outstanding shares in 2018 reflects net cancellations of shares issued as part of compensation plans.See the Statement of Changes in Stockholders’ Equity for these details.

AOCI increased slightly in 2019, but decreased in 2018, reflecting unrealized losses from foreign currency translation losses - see Other Comprehensive Income. 

b. Did the company explain how it would use the cash from the stock offering?

c. Comment on the stock price reaction around the offering.

5. Did your company repurchase common stock during the past three years?
a. If yes, did the company provide an explanation for doing so, including how they financed it?

Yes, for compensation plans, as discussed in (2) above.

b. How much did the shares cost the company?

Discussed in (2) above.
c. Provide the number of shares repurchased and indicate if they are held as treasury shares or were retired.  

Since there is no difference between issued and outstanding shares, all repurchased shares must have been retired.

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