An entity had retained earnings of P3,500,000 at the of beginning of 2021. Throughout 2021, the entity had 40,000 ordinary shares of P100 par value that are issued and outstanding. During 2021, the entity reported net income of P5,500,000, purchased 5,000 treasury shares for P600,000, declared cash dividends of P2,000,000, reissued all treasury shares at a gain of P200,000, and declared and issued a 10% ordinary share bonus issue when the market value was P150 per share. What amount should be reported as retained earnings on December 31, 2021?
Q: Assume the $11,700 Treasury bill, 6% for 10 weeks. Calculate the effective rate of interest. (Use…
A: Effective rate is calculated by adjusting annual rate as per the maturity period.
Q: Accounts Balances Equipment $16,000 Accounts payable 1,000 23,000 Salaries expense Common stock Land…
A: The balance sheet is a summary of permanent accounts prepared at the end of the accounting period.…
Q: Transaction costs are capitalized when acquiring investment in equity or debt securities, except…
A: Transaction costs are incurred while investment is done in equity or debt security.Whether it should…
Q: Deductions from Gross Income Classify the items for deduction in the following scenarios. 2. Debtor…
A: Itemized deductions are those deductions which allow the person to deduct the designated expenses…
Q: 5. Goods received in January 2020 were recorded as purchase on account in December 2019. The goods…
A: The student has specifically asked for part 5, therefore, I am answering part 5. The balance sheet…
Q: January 1, 2012 - Company issues $10,000,000 of no par common shares at $10 each. DR. Cash…
A: The contributed surplus is the amount that is different between the par value of the stock and the…
Q: What amount of gain (loss) should ABC recognize on Dec 31, 20x1 and Jan 10, 20X2 respectively?…
A: FVOCI stands for Fair Value Through Other Comprehensive Income. It is the method to recognize the…
Q: On 1 July 2020, Sugar Ltd acquired 89% of the shares of Glider Ltd for $690,000. At this date, the…
A: Given : On July 1 2020, Sugar ltd acquired 89% of the shares of the Gliders ltd for Pre Acquisition…
Q: On April 12 Hong co. agrees to accept a 60 day, 6% 6,900 note from indigo co to extend the due date…
A: On the maturity date, the journal entry will be passed for the payment of the principal amount of…
Q: Delivery of keys of the place or depositary where the movable is stored is not a mode of a valid…
A: The correct answer for the above mentioned question is given in the following steps for your…
Q: Which of the following funds is used to account for government sponsored investment pools that…
A: An Investment Trust Fund is a fund that develops when the government sponsors a multi-government…
Q: Grate Expectations is a local cheese shop that sells 10,000 no par value common shares for $8 each…
A: A compnay can raise finance by issuing shares.It receives some money on issue of shares and…
Q: A corporation issues 7 500 shares of capital share as a dividend in an effort to reduce retained…
A: The stock dividend is a method of capitalizing on retained earnings. It is issued to the existing…
Q: On March 1, 20X1 ABC Co. assigned its P1,000,000 accounts receivable to B Bank in exchange for a…
A: Factoring: Factoring is a type of business loan in which the business organization sells its…
Q: ABC Co assigned P500,000 of its account receivables to XYZ Bank as a security for a 10% loan of…
A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…
Q: At the end of the accounting period ending December 31 of the current year, the following totals…
A: Requirement: Calculation of adjusted income and adjusted total assets from the given information.…
Q: Maryanne owns a 50% interest. She contributed a computer system wit a fair value of $13000 and…
A: The interest in the partnership means the share of the partner in the partnership. The interest in…
Q: Required: Only advise on the consequences for XYZ Pty Limited NOT its shareholders.
A: Franking = Amount Franked×%Franked×Tax%/(1-tax%)]
Q: Item No. 6 is based on the following information: 1091 of Ismuol 9an9qx3 noitesinsg10 Kiss Company…
A: The fixed assets acquired against shares are recorded at fair market value of fixed assets.
Q: 12. Prepare Trading and Profit and Loss account from the following information for the 31st December…
A: Trading account refers to the investment account which contains the securities, cash and other…
Q: On January 1, 2020, P Company purchased 32,000 shares of the 40,000 outstanding shares of S Company…
A: Net Assets: Net Assets are the amounts which is determined as the difference between total assets…
Q: ne 1,
A: These are the accounting transactions that are having a monetary impact on the financial statement…
Q: Ben started its business in Bangsar many years ago, opened Ben Gym Centre. The Centre runs various…
A: A lease can be classified as an operating lease or finance lease. If the following conditions are…
Q: The US equity risk premium is 4%. What is the estimate for Alpha Inc.'s cost of equity capital?
A: Cost of equity means the return that a company Or investor must realise from the given investment Or…
Q: You are examining the financial statements of DON JOHN CORPORATION which ends on December 31. DON…
A: Errors in accounting is the non-intentional mistakes or mismatches or discrepancies in the…
Q: The tax applicable on the transaction is:
A: A capital gains tax(CGT) is a tax on the income realized at the sale of a non-stock asset. The…
Q: Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term…
A: The process of recording business transactions in the books of accounts for the first time is…
Q: Consider a 00 par valu vertible semiannually, which will convertible semiannually. Consti
A: Bond refers to the fixed income financial documents which reflect the loan taken by a borrower from…
Q: schedule K-1 for the same year reporting his share of the ordinary business income $10000. The only…
A: The adjusted basis of an asset is altered as a result of a variety of events that transpired during…
Q: Determining Overhead Rate; Normal Capacity Method. Desmond Corp. estimates that its production for…
A:
Q: In May 2021, Reginald graduated from the Naval Academy with a degree in aeronautical engineering and…
A: Total eligible moving expense = Gasoline + Renting a truck from UPAYME rentals + Tow trailer amount…
Q: Enibro Item No. 5 is based on the following information: 019nd no bsand 21 S..oW mail 16 Mario…
A: The companies procure funds for their financing needs through the issue of shares. The shares are…
Q: E5-9 The Palmer Acres Inn is trying to determine its break-even point during its off-peak- season.…
A: The Break-even point is the situation where the company does not earn profit and does not incur a…
Q: Deductions from Gross Income Classify the items for deduction in the following scenarios. 3. A…
A: Contribution to domestic charitable organization is subject to limit unless the organization is an…
Q: Delta Corporation issued 10,000 shares of no-par common stock for $1 per share on July 13. Record…
A: Answer:- Common stock meaning:- A security that symbolizes ownership in a firm is known as common…
Q: If Tony dies prior to expiration of the 10-year period, will any portion of the remaining payments…
A: No, any portion of remaining payments will not include in Tony’s gross estate under 2033. it is…
Q: client who is in his 70's. in 2020, he incurred significant capital losses in the amount of $65,000…
A: The capital losses are very common methods of making loss but only $3000 can be adjusted against…
Q: Excel: What does the "subtotal" function accomplish and how do I use it?
A: Subtotal function: This function enables to arrive at the subtotal in a list or a database This…
Q: (Treatment of goodwill) A and B are partners sharing profits and losses in the ratio of 3: 2. On…
A: A partnership is a relationship between individuals who are agreed to share the profit of a business…
Q: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate…
A: Relevant cost of a product is the cost which is specifically incurred for the product. Variable cost…
Q: Calculate revenue for the month of September using the accrual basis of accounting. (Do not leave…
A: In the accrual basis of accounting, all revenue items are considered which belong to that specific…
Q: The following table was taken from Firm X's Production Cost Report: Completed and transferred…
A: FIFO: FIFO stands for First-In, First-Out. In this method inventory purchased first will be sell…
Q: Deductions from Gross Income Classify the items for deduction in the following scenarios. 2. Debtor…
A: For determining taxable income, the amount of expenses incurred during the taxable period needs to…
Q: Mohammed Corporation's comparative balance sheet for current assets and liabilities was as follows:…
A: Introduction: Operating activities: Cash used for maintaining the day to day business activities all…
Q: You are examining the financial statements of DON JOHN CORPORATION which ends on December 31. DON…
A: Inventory: The word "inventory" is an accounting term that refers to all of the stock that is in the…
Q: Compute the Day’s Sales in Receivable Index and select the best Answer: 12/31/2020…
A: Day’s Sales in Receivable Index = (Accounts receivables year 2 / Net sales year 2) / (Accounts…
Q: . The TAXABLE NET INCOME is: 1.- • The INCOME TAX DUE is: 2. . TAX PAYABLE The INCOME is: 3.
A: Taxable net income of the domestic corporation is the taxable income which has been earned by such…
Q: Answer the following items: 1. Identify the modes of transport DHL uses.
A: Transportation is an essential part of every business organization. Businesses are involved in…
Q: Dangerous Company’s investment property has a carrying amount of P800,000 before any year-end…
A: The Unrealized loss for investment property is recognised when fair value of assets is less than the…
Q: 1- Refer to the information provided in Table1. The table sets out Sue's Surfboards' total product…
A: Marginal cost is the incremental cost incurred for producing 1 extra unit of output. Marginal cost =…
An entity had
Step by step
Solved in 2 steps with 2 images
- 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.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%.Cary Corporation has 50,000 shares of 10 par common stock authorized. The following transactions took place during 2019, the first year of the corporations existence: Sold 5,000 shares of common stock for 18 per share. Issued 5,000 shares of common stock in exchange for a patent valued at 100,000. At the end of Carys first year, total contributed capital amounted to: a. 40,000 b. 90,000 c. 100,000 d. 190,000
- 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. 3,370,000Net Income and Comprehensive Income At the beginning of 2019, JR Companys shareholders equity was as follows: During 2019, the following events and transactions occurred: 1. JR recognized sales revenues of 108,000. It incurred cost of goods sold of 62,000 and operating expenses of 12,000, 2. JR issued 1,000 shares of its 5 par common stock for 14 per share. 3. JR invested 30,000 in available-for-sale securities. At the end of the year, the securities had a fair value of 35,000. 4. JR paid dividends of 6,000. The income tax rate on all items of income is 30%. Required: 1. Prepare a 2019 income statement for JR which includes net income and comprehensive income ignore earnings per share). 2. For 2016 prepare a separate (a) income statement (ignore earnings per share) and (b) statement of comprehensive income.During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
- Tama Companys capital structure consists of common stock and convertible bonds. At the beginning of 2019, Tama had 15,000 shares of common stock outstanding; an additional 4,500 shares were issued on May 4. The 7% convertible bonds have a face value of 80,000 and were issued in 2016 at par. Each 1,000 bond is convertible into 25 shares of common stock; to date, none of the bonds have been converted. During 2019, the company earned net income of 79,200 and was subject to an income tax rate of 30%. Required: Compute the 2019 diluted earnings per share.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?Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1, 000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50, 000 to retire bonds with a face value (and book value) of 50, 000. e. On July 2, 2019, Farrell purchased equipment for 63, 000 cash. f. On December 31, 2019, land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows. (Appendix 21.1) Spreadsheet and Statement Refer to the information for Farrell Corporation in P21-13. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support a 2019 statement of cash flows. (Hint: Combine the income statement and December 31, 2019, balance sheet items for the adjusted trial balance. Use a retained earnings balance of 291,000 in this adjusted trial balance.) 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)
- Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1,000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50,000 to retire bonds with a face value (and book value) of 50,000. e. On July 2, 2019, Farrell purchased equipment for 63,000 cash. f. On December 31, 2019. land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows.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.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.
