3. Al-Busthan corporation has a year end of 31 December. The company has in issue 400,000 Ordinary shares and 15,000, 6% cumulative redeemable preference shares of OMR 10 each. On 1 July 2020, the directors declared an interim dividend of OMR20,000. On 31 December 2020, the directors proposed a final dividend of OMR 25,000. On 1 Feb 2021, at the annual general meeting they proposed final dividend for 2020 which was approved. All the dividends whether equity or preference were paid on 1 Mar 2021. Note that there are no dividend in arrears with regards to preferred stock.

3. Al-Busthan corporation has a year end of 31 December. The company has in issue 400,000 Ordinary shares and 15,000, 6% cumulative redeemable preference shares of OMR 10 each. On 1 July 2020, the directors declared an interim dividend of OMR20,000. On 31 December 2020, the directors proposed a final dividend of OMR 25,000. On 1 Feb 2021, at the annual general meeting they proposed final dividend for 2020 which was approved. All the dividends whether equity or preference were paid on 1 Mar 2021. Note that there are no dividend in arrears with regards to preferred stock.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 3P: On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a...

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The controller of Red Lake Corporation has requested assistance in determining income, basic earnings per share, and diluted earnings per share for presentation on the companys income statement for the year ended September 30, 2020. As currently calculated, Red Lakes net income is 540,000 for fiscal year 2019-2020. Your working papers disclose the following opening balances and transactions in the companys capital stock accounts during the year: 1. Common stock (at October 1, 2019, stated value 10, authorized 300,000 shares; effective December 1, 2019, stated value 5, authorized 600,000 shares): Balance, October 1, 2019issued and outstanding 60,000 shares December 1, 201960,000 shares issued in a 2-for-l stock split December 1, 2019280,000 shares (stated value 5) issued at 39 per share 2. Treasury stockcommon: March 3, 2020purchased 40,000 shares at 38 per share April 1, 2020sold 40,000 shares at 40 per share 3. Noncompensatory stock purchase warrants, Series A (initially, each warrant was exchangeable with 60 for 1 common share; effective December 1, 2019, each warrant became exchangeable for 2 common shares at 30 per share): October 1, 201925,000 warrants issued at 6 each 4. Noncompensatory stock purchase warrants, Series B (each warrant is exchangeable with 40 for 1 common share): April 1, 202020,000 warrants authorized and issued at 10 each 5. First mortgage bonds, 5%, due 2029 (nonconvertible; priced to yield 5% when issued): Balance October 1, 2019authorized, issued, and outstandingthe face value of 1,400,000 6. Convertible debentures, 7%, due 2036 (initially, each 1,000 bond was convertible at any time until maturity into 20 common shares; effective December 1, 2019, the conversion rate became 40 shares for each bond): October 1, 2019authorized and issued at their face value (no premium or discount) of 2,400,000 The following table shows the average market prices for the companys securities during 2019-2020: Adjusted for stock split Required: Prepare a schedule computing: 1. the basic earnings per share 2. the diluted earnings per share that should be presented on Red Lakes income statement for the year ended September 30, 2020 A supporting schedule computing the numbers of shares to be used in these computations should also be prepared. Assume an income tax rate of 30%.
Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares of 10%, 100 par, nonconvertible preferred stock outstanding, on which the years dividends had been paid. At the beginning of 2019, the company had 7,000 shares of common stock outstanding. On April 2, 2019, the company issued another 2,000 shares of common stock so that 9,000 common shares were outstanding at the end of 2019. Common dividends of 17,000 had been paid during 2019. At the end of 2019, the market price per share of common stock was 17.50. Required: 1. Compute Mononas basic earnings per share for 2019. 2. Compute the price/earnings ratio for 2019.
Hyde Corporations capital structure at December 31, 2018, was as follows: On July 2, 2019, Hyde issued a 10% stock dividend on its common stock and paid a cash dividend of 2.00 per share on its preferred stock. Net income for the year ended December 31, 2019, was 780,000. What should be Hydes 2019 basic earnings per share? a. 7.80 b. 7.09 c. 7.68 d. 6.73
On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of 10 par value common stock at 15 per share (400,000 shares were authorized). During the period January 1, 2014, through December 31, 2019, Kent reported net income of 750,000 and paid cash dividends of 380,000. On January 5, 2019, Kent purchased 12,000 shares of its common stock at 12 per share. On December 28, 2019, 8,000 treasury shares were sold at 8 per share. Kent used the cost method of accounting for treasury shares. What is Kents total shareholders equity as of December 31, 2019? a. 3,290,000 b. 3,306,000 c. 3,338,000 d. 3,370,000
ABC SAOG has in issue 2,000,000 ordinary shares of OMR 0.500 fully paid. On 31st Dec 2018 management board has decided to pay a dividend of 100 baisa on each ordinary share which was readily approved by the shareholders. The date of payment was 10th March 2019. During the year the company earned a profit after tax of OMR 200,000. The company paid the amount of dividends for the ordinary shareholders for the year 2019. What will be the Net Retained earnings after the payment of dividend to shareholders assuming that the company had opening Retained earnings on 1st January 2018 of OMR 800,000? a. OMR 1,000,000 b. OMR 600,000 c. OMR 800,000 d. OMR 300,000 The amount of ordinary dividend to be distributed to the shareholder is a. OMR 200,000 b. OMR 1,000,000 c. OMR 700,000 d. OMR 400,000
Blossom Corporation was organized on January 1, 2019. During its first year, the company issued 2,300 shares of HK$50 par value preference shares and 130,000 shares of HK$10 par value ordinary shares. At December 31, the company declared the following cash dividends: 2019, HK$5,300; 2020, HK$13,100; and 2021, HK$30,000 (HK$ in thousands). Show the allocation of dividends to each class of shares, assuming the preference share dividend is 6% and non-cumulative. Allocation to preferred shares Remainder to ordinary shares HK$ List of Accounts HK$ eTextbook and Media 2019 5,300 HK$ HK$ 2020 HK$ HK$ 2021
The Board of Directors of GHI Corporation declared an annual dividend of P5 per share on 50,000 shares of P10 par value ordinary shares issued and outstanding at their meeting on December 10, 2020. This is payable on March 31,2021 to shareholders of record on December 31,2020.5. Which of the following is the correct entry to be made on March 31, 2021. * O Debit Dividends Payable P250,000 and Credit Cash P250,000 O Debit Dividends Payable P500,000 and Credit Retained Earnings P500,000 Debit Retained Earnings P250,000 and Credit Dividends Payable P250,000 No entry should be made because the books have already been updated on December 31, 2020
Sintok Niaga Bhd issues 40,000 shares at RM1 each during the year ended 31 December 2019. The applications are received with full payment on October 31, 2019 for 100,000 shares. The shares are subsequently allotted on December 31, 2019 to the successful applicants, while unsuccessful applicants are refunded at the same date. Show the journal entries to record the transactions. Sintok Niaga Bhd had the following transactions pertaining to its ordinary shares during the first year of operations. Jan 10 Issued 80,000 shares for cash at RM6 per share. Mar 1 Issued 5,000 shares to lawyer in payment of a bill for RM40,000 for services rendered in helping the company to incorporate. July 1 Issued 30,000 shares for cash at RM8 per share. Sep 1 Issued 60,000 shares for cash at RM10 per share. REQUIRED: Prepare the journal entries to record the transactions.
4. During 2020, Maldives Corporation started their company on January 1st and reported the following selected transactions: Jan 1 Issued 20,000 common shares at $15.00 per share. Apr 15 Issued 2,000 common shares at $12.80 per share. May 30 Repurchased 1,000 common shares for a price of $13 Nov 30 Declared a 10% common stock dividend for the shareholders on record on Dec 15 and to be distributed on Dec 20. The market price of the common shares on this date was $12 per share. (a) Prepare all journal entries required for the above transactions for Maldives Corporation. No explanations are required. (b) What are the number of common shares outstanding at Dec 31, 2020?
Sintok Niaga Bhd issues 40,000 shares at RM1 each during the year ended 31 December 2019. The applications are received with full payment on October 31, 2019 for 100,000 shares. The shares are subsequently allotted on December 31, 2019 to the successful applicants, while unsuccessful applicants are refunded at the same date. Show the journal entries to record the transactions. Maxwell had the following transactions pertaining to its ordinary shares during the first year of operations. Jan 10 Issued 80,000 shares for cash at RM6 per share. Mar 1 Issued 5,000 shares to lawyer in payment of a bill for RM40,000 for services rendered in helping the company to incorporate. July 1 Issued 30,000 shares for cash at RM8 per share. Sep 1 Issued 60,000 shares for cash at RM10 per share. REQUIRED: Prepare the journal entries to record the transactions.
The Board of Directors of GHI Corporation declared an annual dividend of P5 per share on 50,000 shares of P10 par value ordinary shares issued and outstanding at their meeting on December 10, 2020. This is payable on March 31,2021 to shareholders of record on December 31,2020.The correct entry to record to be made on December 10,2020 :* Debit Dividends Payable P500,000 and Credit Cash P500,000 No entry should be made O Debit Retained Earnings P250,000 and Credit Dividends Payable P250,000 O Debit Dividends Payable P250,000 and Credit Cash P250,000