Red Corporation had the following transactions related period January to June 2021. Red Corporation had been registered as a p authorized to issue 300,000 ordinary shares Red Corporation issued 75,000 common stock was sold at a market price of $21 To fulfill the company's business plan, Red
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- 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.Outstanding Stock Lars Corporation shows the following information in the stockholders equity section of its balance sheet: The par value of common stock is S5, and the total balance in the Common Stock account is $225,000. There are 13,000 shares of treasury stock. Required: What is the number of shares outstanding? Use the following information for Exercises 10-58 and 10-59: Stahl Company was incorporated as a new business on January 1, 2019. The company is authorized to issue 600,000 shares of $2 par value common stock and 80,000 shares of 6%, S20 par value, cumulative preferred stock. On January 1, 2019, the company issued 75,000 shares of common stock for $15 per share and 5,000 shares of preferred stock for $25 per share. Net income for the year ended December 31, 2019, was $500,000.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%.
- Comprehensive Young Corporation has been operating successfully for several years. It is authorized to issue 24,000 shares of no-par common stock and 6,000 shares of 8%, 100 par preferred stock. The Contributed Capital section of its January 1, 2019, balance sheet is as follows: Part a. A shareholder has raised the following questions: 1. What is the legal capital of the corporation? 2. At what average price per share has the preferred stock been issued? 3. How many shares of common stock have been issued (the common stock has been issued at an average price of 23 per share)? Part b. The company engaged in the following transactions in 2019: Required: 1. Answer the questions in Part a. 2. Prepare journal entries to record the transactions in Part b. 3. Prepare the Contributed Capital section of Youngs December 31, 2016, balance sheet.Anoka Company reported the following selected items in the shareholders equity section of its balance sheet on December 31, 2019, and 2020: In addition, it listed the following selected pretax items as a December 31, 2019 and 2020: The preferred shares were outstanding during all of 2019 and 2020; annual dividends were declared and paid in each year. During 2019, 2,000 common shares were sold for cash on October 4. During 2020, a 20% stock dividend was declared and issued in early May. At the end of 2019 and 2020, the common stock was selling for 25.75 and 32.20, respectively. The company is subject to a 30% income tax rate. Required: 1. Prepare the comparative 2019 and 2020 income statements (multiple-step), and the related note that would appear in Anokas 2020 annual report. 2. Next Level Compute the price/earnings ratio for 2020. How does this compare to 2019? Why is it different?Lyon Company shows the following condensed income statement information for the year ended December 31, 2019: Lyon declared dividends of 6,000 on preferred stock and 17,280 on common stock. At the beginning of 2019, 10,000 shares of common stock were outstanding. On May 1, 2019, the company issued 2,000 additional common shares, and on October 31, 2019, it issued a 20% stock dividend on its common stock. The preferred stock is not convertible. Required: 1. Compute the 2019 basic earnings per share. 2. Show the 2019 income statement disclosure of basic earnings per share. 3. Draft a related note to accompany the 2019 financial statements.
- 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.Presented below is information related to Alligator Corporation for 2019. 1. On September 4, Alligator Corporation sold the 1,000 treasury shares that they had purchased on August 10 at $22 per share. The purchase price of the shares was $25 per share. There is no previous balance in the paid-in-capital from treasury stock account (journalize both purchase and resale).2. On September 20, Alligator Corporation declared & issued a 20% stock dividend on the outstanding common stock when the stock is selling for $50 per share. 3. On December 31, a 3-for-1 stock split is declared and issued.4. On December 31, Alligator Corporation declared a $0.90 per share liquidating dividend on the common stock outstanding. Journalize the following transactions from the perspective of Alligator Corporation.Integrity Company is a publicly held company whose shares are traded in the over-the-counter market. The shareholders’ equity accounts at December 31, 2021 had the following balances (see image below).Transactions during 2022 and other information relating to shareholders’ equity accounts were as follows: February 1: Issued 30,000 ordinary shares to AAA Company in exchange for a piece of land. On this date, the ordinary share had a market price of P20 per share. The land had a carrying value on AAA's books of P420,000 and an assessed value for property taxes of P400,000. March 1: Purchased 5,000 of its own ordinary shares to be held as treasury for P24 per share. May 10: Declared property dividend (equity investments at fair value through profit or loss) to ordinary shareholders. The investments had a carrying amount of P600,000 as of December 31, 2021 and fair values were P720,000 on May 10, 2021 (declaration date) and P736,000 on June 1, 2022 (distribution date). October 1: Reissued…
- On April 10, 2019, Amelia Inc. purchased 450 shares of its own common stock in the market for $22 per share. On September 28, 2019, the company sold 270 of these shares in the open market at a price of $25 per share. Required: a. Use the horizontal model to show the effects on Amelia Inc's financial statements of the purchase of the treasury stock on April 10, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Net Income Revenues Expenses b. Use the horizontal model to show the effects on Amelia Inc's financial statements of the sale of the treasury stock on September 28, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Net Income Revenues Expenses +National Supply’s shareholders’ equity included the following accounts at December 31, 2020: Shareholders’ Equity Common stock, 5 million shares at $1 par $ 5,000,000 Paid-in capital-excess of par 25,000,000 Retained earnings 86,500,000 Required: 1.National Supply reacquired shares of its common stock in two separate transactions and later sold shares. Prepare the entries for each of the transactions under each of two separate assumptions: the shares are (a) retired and (b) accounted for as treasury stock. February 15, 2021 Reacquired 320,000 shares at $8 per share. February 17, 2022 Reacquired 320,000 shares at $5.50 per share. November 9, 2023 Sold 215,000 shares at $7 per share (assume…National Supply's shareholders' equity Included the following accounts at December 31, 2020: Shareholders' Equity Common stock, 4 million shares at $1 par Paid-in capital-excess of par Retained earnings Required: 1. National Supply reacquired shares of its common stock in two separate transactions and later sold shares. Prepare the entries for each of the transactions under each of two separate assumptions: the shares are (a) retired and (b) accounted for as treasury stock. February 15, 2021 February 17, 2022 November 9, 2023 2. Prepare the shareholders' equity section of National Supply's balance sheet at December 31, 2023, assuming the shares are (a) retired and (b) accounted for as treasury stock. Net Income was $20 million in 2021, $21 million in 2022, and $22 million in 2023. No dividends were paid during the three-year period. Complete this question by entering your answers in the tabs below. Req 1 Retired Req 1 Treasury Stock Reacquired 300,000 shares at $9 per share. Reacquired…