before any dividends are paid on the common stock.During its first five years of business (2011 through 2015), the company earned income totaling$3,700,000 and paid dividends of 50 cents per share each year on the common stock outstanding.On January 2, 2013, the company purchased 20,000 shares of its own common stock in theopen market for $400,000. On January 2, 2015, it reissued 10,000 shares of this treasury stock for$250,000. The remaining 10,000 were still held in treasury at December 31, 2015.instructionsa. Prepare the stockho!ders' equity section of the balance sheet for Herndon Industries atDecember 31, 2015. Include supporting schedules showing (1) your computation of any paid-in capital on treasury stock and (2) retained earnings at the balance sheet date. (Hint: Incomeincreases retained earnings, whereas dividends reduce retained earnings. Dividends are notpaid on shares of stock held in treasury.)b. As of December 31, compute Herndon's book value per share of common stock. (Hint: Pookvalue per share is computed only on the shares of stock outstanding.)c. At December 31, 2015, shares of the company's common stock were trading at $30. Explainwhat would have happened to the market price per share had the company split its stock 3-for-1at this date. Also explain what would have happened to the par value of the common stock andto the number of common shares outstanding.Problem Set BConnectaccoUntiNcEarly in 2012, Searfoss, Inc., was organized with authorization to issue 2,000 shares cf $130 parvalue preferred stock and 300,000 shares of $1 par value common stock. Five hundred shares ofthe preferred stock were issued at par, and 80,000 shares of common stock were sold at S15 pershare. The preferred stock pays a 10 percent cumulative dividend.During the first four years of operations (2012 through 2015), the corporation earned a total of$1,950,000 and paid dividends of 40 cents per share in each year on its outstanding common stock.Instructionsa. Prepare the stockholders' equity section of the balance sheet at December 31, 2015. Includea supporting schedule showing your computation of the amount of retained earningsreported. Assume the call price of preferred stock is $110 per share as of December 31, 2015.(Hint: Income increases retained earnings, whereas dividends decrease retained earnings.)b. Are there any dividends in arrears on the company's preferred stock at December 31, 2015?Explain your answer.Assume that interest rates increase steadily from 2012 through 2015. Would you expect themarket price of the company's preferred stock to be higher or lower than its call price of SI10at December 21, 2015? (The call price is the amount the company must pay to repurchase theshares from the stockholders.)с.

Stockholders' equity is the amount of assets remaining in a business after all liabilities have been…

a. Prepare the stockholders' equity section of the balance sheet for December 31, 2015. Include supporting schedules showing (1) your computation of any paid- in capitai on treasury stock and (2) retained earnings at the balance sheet date. (Hint: Income increases retained earnings, whereas dividends reduce retained earnings. Dividends are not paid on shares of stock held in treasury.) b. As of December 31, compute Herndon's book value per share of common stock. (Hint: Pook value per share is computed only on the shares of stock outstanding.) c. At December 31, 2015, shares of the company's common stock were trading at $30. Explain what would have happened to the market price per share had the company split its stock 3-for-1 at this date. Also explain what would have happened to the par value of the common stock and to the number of common shares outstanding.

a. Prepare the stockholders' equity section of the balance sheet for December 31, 2015. Include supporting schedules showing (1) your computation of any paid- in capitai on treasury stock and (2) retained earnings at the balance sheet date. (Hint: Income increases retained earnings, whereas dividends reduce retained earnings. Dividends are not paid on shares of stock held in treasury.) b. As of December 31, compute Herndon's book value per share of common stock. (Hint: Pook value per share is computed only on the shares of stock outstanding.) c. At December 31, 2015, shares of the company's common stock were trading at $30. Explain what would have happened to the market price per share had the company split its stock 3-for-1 at this date. Also explain what would have happened to the par value of the common stock and to the number of common shares outstanding.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter13: Earnings Per Share (eps)

Section: Chapter Questions

Problem 1R: Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of 100 par value, 8%...

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Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of 100 par value, 8% preferred stock outstanding on January 1, 2011. Each share of preferred stock is convertible into four shares of common stock. The stock has not been converted. During the year, Ponce Towers issued additional shares of common stock as follows: For 2011, Ponce Towers, Inc., had income from continuing operations of 545,000 and a 72,000 loss from discontinued operations (net of tax). As vice president of finance for the firm, you have been asked to calculate earnings per share for 2011. The worksheet EPS has been provided to assist you.
Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of 100 par value, 8% preferred stock outstanding on January 1, 2011. Each share of preferred stock is convertible into four shares of common stock. The stock has not been converted. During the year, Ponce Towers issued additional shares of common stock as follows: For 2011, Ponce Towers, Inc., had income from continuing operations of 545,000 and a 72,000 loss from discontinued operations (net of tax). Open the file EPS from the website for this book at cengagebrain.com. Enter all input items (AF) in the appropriate cells in the Data Section. Enter all formulas in the appropriate cells in the Answer Section. Enter your name in cell A1. Save the completed file as EPS2. Print the worksheet when done. Also print your formulas. Check figure: Basic earnings per share from continuing operations (cell D29), 5.94.
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
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Cambridge Corp. has a single class of shares. As its year ended December 31, 2015, the company had 2,500,000 shares issued and outstanding. On the stock exchange, these shares are trading for $10 per share. In the company's accounts, these shares had a value of $30,000,000. The equity accounts also show $450,000 of contributed surplus from previous repurchases of shares. On January 15, 2016, Cambridge repurchased and cancelled 100,000 shares at a cost of $10 per share. Later in the year, on August 20, the company repurchased and cancelled a further 300,000 shares at $15 per share. Record the journal entries for August 20, 2016 under ASPE. Please round your final answer to the nearest dollar. Do not round intermediary answers. Do not use $ signs in your final answer. Enter $0 for any journal entries that do not apply. DR. Common shares - Type your answer here DR. Cash- Type your answer here DR. Contributed surplus - Type your answer here DR. Retained earnings - CR. Common shares - F12…
Early in 2009, Feller Corporation was formed with authorization to issue 50,000 shares of $1 parvalue common stock. All shares were issued at a price of $8 per share. The corporation reportednet income of $82,000 in 2009, $25,000 in 2010, and $78,000 in 2011. No dividends were declaredin any of these three years. In 2010, the company purchased its own shares for $35,000 in the open market. In 2011, it reis-sued all of its treasury stock for $40,000. Instructionsa. Prepare the stockholders’ equity section of the balance sheet at December 31, 2011. Include asupporting schedule showing your computation of retained earnings at the balance sheet date.(Hint: Income increases retained earnings.)b. As of December 31, compute the company’s book value per share of common stock.c. Explain how the treasury stock transactions in 2010 and 2011 were reported in the company’sstatement of cash flows.
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In 2016, Borland Semiconductors entered into the transactions described below. In 2013, Borland had issued 170 million shares of its $1 par common stock at $34 per share. Required: Assuming that Borland retires shares it reacquires, record the appropriate journal entry for each of the following transactions: 1. On January 2, 2016, Borland reacquired 10 million shares at $32.50 per share. 2. On March 3, 2016, Borland reacquired 10 million shares at $36 per share. 3. On August 13, 2016, Borland sold 1 million shares at $42 per share. 4. On December 15, 2016, Borland sold 2 million shares at $36 per share.
In 2016, Poe's Products completed the treasury stock transactions described below. January 2: Reacquired 10 million shares at $16 per share. February 15: Sold 3 million shares at $20 per share. September 20: Sold 3 million treasury shares at $15 per share. Poe had issued 50 million shares of its $1 par common stock for $18 several years ago. Required: Record the above transactions, assuming that Poe's Products uses the cost method.
On December 29, 2009, Bay Company was registered at the Securities and Exchange Commission with 100,000 authorized ordinary share of P100 par value. On the same date, 40,000 shares were sold and issued at P105 per share. On May 14, 2010, the corporation purchased 600 shares of its ordinary share capital at P110 per share. On September 15, 2010, 400 treasury shares were sold at P95. During 2010, the corporation realized a net income after tax of P830,000 and paid a cash dividend of P20,000. What is the total shareholders’ equity of Bay on December 31, 2010? A. P10, 602,000 B. P4, 982,000 C. P4, 802,000 D. P4, 352,000
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