Assume that the following data relative to Oregan Company for 2020 is available:Net Income$2,100,000Transactions in Common SharesChangeCumulativeJan. 1, 2020, Beginning number700,000Mar. 1, 2020, Purchase of treasury shares(60,000)640,000June 1, 2020, 50% Stock Dividend320,000960,000Nov. 1, 2020, Issuance of shares240,0001,200,0006% Cumulative Convertible Preferred StockSold at par on January 1, 2020, convertible into 200,000 shares of common$1,000,000Stock OptionsExercisable at the option price of $25 per share. Average market price in 2020, $30 and 90,000 options outstanding since 2019Instructions(a) Compute the basic earnings per share for 2020. (Round to the nearest penny.)(b) Compute the diluted earnings per share for 2020. (Round to the nearest penny.)

Earnings per share: Earnings per share, commonly noted as EPS is the net earnings available for…

Assume that the following data relative to Oregan Company for 2020 is available: Net Income $2,100,000 Transactions in Common Shares Change Cumulative Jan. 1, 2020, Beginning number 700,000 Mar. 1, 2020, Purchase of treasury shares (60,000) 640,000 June 1, 2020, 50% Stock Dividend Nov. 1, 2020, Issuance of shares 6% Cumulative Convertible Preferred Stock 320,000 960,000 240,000 1,200,000 Sold at par on January 1, 2020, convertible into 200,000 shares of common $1,000,000 Stock Options Exercisable at the option price of $25 per share. Average market price in 2020, $30 and 90,000 options outstanding since 2019 Instructions (a) Compute the basic earnings per share for 2020. (Round to the nearest penny.) (b) Compute the diluted earnings per share for 2020. (Round to the nearest penny.)

Assume that the following data relative to Oregan Company for 2020 is available: Net Income $2,100,000 Transactions in Common Shares Change Cumulative Jan. 1, 2020, Beginning number 700,000 Mar. 1, 2020, Purchase of treasury shares (60,000) 640,000 June 1, 2020, 50% Stock Dividend Nov. 1, 2020, Issuance of shares 6% Cumulative Convertible Preferred Stock 320,000 960,000 240,000 1,200,000 Sold at par on January 1, 2020, convertible into 200,000 shares of common $1,000,000 Stock Options Exercisable at the option price of $25 per share. Average market price in 2020, $30 and 90,000 options outstanding since 2019 Instructions (a) Compute the basic earnings per share for 2020. (Round to the nearest penny.) (b) Compute the diluted earnings per share for 2020. (Round to the nearest penny.)

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 24E

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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
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?
Cash dividends on the 10 par value common stock of Garrett Company were as follows: The 4th-quarter cash dividend was declared on December 21, 2019, to shareholders of record on December 31, 2019. Payment of the 4th-quarter cash dividend was made on January 18, 2020. In addition, Garrett declared a 5% stock dividend on its 10 par value common stock on December 3, 2019, when there were 300,000 shares issued and outstanding and the market value of the common stock was 20 per share. The shares were issued on December 24, 2019. What was the effect on Garretts shareholders equity accounts as a result of the preceding transactions?
Raun Company had the following equity items as of December 31, 2019: Preferred stock, 9% cumulative, 100 par, convertible Paid-in capital in excess of par value on preferred stock Common stock, 1 stated value Paid-in capital in excess of stated value on common stock| Retained earnings The following additional information about Raun was available for the year ended December 31, 2019: 1. There were 2 million shares of preferred stock authorized, of which 1 million were outstanding. All 1 million shares outstanding were issued on January 2, 2016, for 120 a share. The preferred stock is convertible into common stock on a 1-for-1 basis until December 31, 2025; thereafter, the preferred stock ceases to be convertible and is callable at par value by the company. No preferred stock has been converted into common stock, and there were no dividends in arrears at December 31, 2019. 2. The common stock has been issued at amounts above stated value per share since incorporation in 2002. Of the 5 million shares authorized, 3,580,000 were outstanding at January 1, 2019. The market price of the outstanding common stock has increased slowly but consistently for the last 5 years. 3. Raun has an employee share option plan where certain key employees and officers may purchase shares of common stock at 100% of the marker price at the date of the option grant. All options are exercisable in installments of one-third each year, commencing 1 year after the date of the grant, and expire if not exercised within 4 years of the grant date. On January 1, 2019, options for 70,000 shares were outstanding at prices ranging from 47 to 83 a share. Options for 20,000 shares were exercised at 47 to 79 a share during 2019. During 2019, no options expired and additional options for 15,000 shares were granted at 86 a share. The 65,000 options outstanding at December 31, 2019, were exercisable at 54 to 86 a share; of these, 30,000 were exercisable at that date at prices ranging from 54 to 79 a share. 4. Raun also has an employee share purchase plan whereby the company pays one-half and the employee pays one-half of the market price of the stock at the date of the subscription. During 2019, employees subscribed to 60,000 shares at an average price of 87 a share. All 60,000 shares were paid for and issued late in September 2019. 5. On December 31, 2019, there was a total of 355,000 shares of common stock set aside for the granting of future share options and for future purchases under the employee share purchase plan. The only changes in the shareholders equity for 2019 were those described previously, the 2019 net income, and the cash dividends paid. Required: Prepare the shareholders equity section of Rauns balance sheet at December 31, 2019. Substitute, where appropriate, Xs for unknown dollar amounts. Use good form and provide full disclosure. Write appropriate notes as they should appear in the publisher financial statements.
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Stock Dividends Crystal Corporation has the following information regarding its common stock: S10 par. with 500.000 shares authorized, 213,000 shares issued, and 183,700 shares outstanding. On August 22, 2019, Crystal declared and paid a 15% stock dividend when the market price of the common stock was $30 per share. Required: Prepare the journal entries to record declaration and payment of this stock dividend. Prepare the journal entries to record declaration and payment assuming it was a 30% stock dividend.
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.
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