E15.2 (LO 1) (Recording the Issuance of Common and Preferred Stock) Kathleen Battle Corporation was organized on January 1, 2020. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 80,000 shares of common stock for cash at $5 per share. Mar. 1 Issued 5,000 shares of preferred stock for cash at $108 per share. Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000; the fair value of the land was $80,000. May 1 Issued 80,000 shares of common stock for cash at $7 per share. Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $50,000 for services rendered in helping the company organize. Sept. 1 Issued 10,000 shares of common stock for cash at $9 per share. Nov. 1 Issued 1,000 shares of preferred stock for cash at $112 per share.

E15.2 (LO 1) (Recording the Issuance of Common and Preferred Stock) Kathleen Battle Corporation was organized on January 1, 2020. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The following stock transactions were completed during the first year. Jan. 10 Issued 80,000 shares of common stock for cash at $5 per share. Mar. 1 Issued 5,000 shares of preferred stock for cash at $108 per share. Apr. 1 Issued 24,000 shares of common stock for land. The asking price of the land was $90,000; the fair value of the land was $80,000. May 1 Issued 80,000 shares of common stock for cash at $7 per share. Aug. 1 Issued 10,000 shares of common stock to attorneys in payment of their bill of $50,000 for services rendered in helping the company organize. Sept. 1 Issued 10,000 shares of common stock for cash at $9 per share. Nov. 1 Issued 1,000 shares of preferred stock for cash at $112 per share.

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 28E

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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
Winona Company began 2019 with 10,000 shares of 10 par common stock and 2,000 shares of 9.4%, 100 par, convertible preferred stock outstanding. On April 2 and June 1, respectively, the company issued 2,000 and 6,000 additional shares of common stock. On November 16, Winona declared a 2-for-1 stock split. The preferred stock was issued in 2018. Each share of preferred stock is currently convertible into 4 shares of common stock. To date, no preferred stock has been converted. Current dividends have been paid on both preferred and common stock. Net income after taxes for 2019 totaled 109,800. The company is subject to a 30% income tax rate. The common stock sold at an average market price of 24 per share during 2019. Required: 1. Prepare supporting calculations for Winona and compute its: a. basic earnings per share b. diluted earnings per share 2. Show how Winona would report the earnings per share on its 2019 income statement. Include an accompanying note to the financial statements. 3. Next Level Assume Winona uses IFRS. Discuss what Winona would do differently for computing earnings per share, and then repeat Requirement 1 under IFRS.
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.
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.
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
Contributed Capital Adams Companys records provide the following information on December 31, 2019: Additional information: 1. Common stock has a 5 par value, 50,000 shares are authorized, 15,000 shares have been issued and are outstanding. 2. Preferred stock has a 100 par value, 3,000 shares are authorized, 800 shares have been issued and are outstanding. Two hundred shares have been subscribed at 120 per share. The stock pays an 8% dividend, is cumulative, and is callable at 130 per share. 3. Bonds payable mature on January 1, 2023. They carry a 12% annual interest rate, payable semiannually. Required: Prepare the Contributed Capital section of the December 31, 2019, balance sheet for Adams. Include appropriate parenthetical notes.
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.
EllaJane Corporation was organized several years ago and was authorized to issue 4,000,000 shares of $50 par value 6% preferred stock. It is also authorized to issue 1,750,000 shares of $1 par value common stock. In its fifth year, the corporation has the following transactions: Journalize the transactions.
In late 2020, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 4,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2021, 2,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $25 per share.Required:1. Prepare journal entries to record these transactions.2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2021. (Assume net income for the first quarter 2021 was $1,250,000.)
Overland Corporation is authorized to issue 250,000 shares of $1 parvalue common stock. During 2020, Overland Corporation took part in the following selected transactions:1. Issued 55,000 shares of stock at $76 per share, less costs related to the issuance of the stock totaling $27,000.2. Issued 10,000 shares of stock for land appraised at $815,000. The stock was actively traded on a national stock exchange atapproximately $78 per share on the date of issuance.3. Purchased 6,000 shares of treasury stock at $74 per share. The treasury shares purchased were issued in 2009 at $46per share.Instructions(a) Prepare the journal entry to record item 1.(b) Prepare the journal entry to record item 2.(c) Prepare the journal entry to record item 3 using the cost method
P15-1 (LO1,2,3,4) Equity Transactions and Statement Preparation On January 5, 2020, Phelps Corporation received a charter granting the right to issue common and preferred stock as provided below: Cumulative and nonparticipating preferred stock: Number of shares authorized 5,000 shares Par value $ 100 per share Dividend rate 8% Common stock: Number of shares authorized 50,000 shares Par value $ 10 per share It then completed these transactions. Jan. 11 Issued common stock Number of shares 20,000 Issue price per share $ 16.00 Feb. 1 Issued preferred stock to Sanchez Corp. for assets with the following values: Fair value of equipment $ 50,000 Fair value of a factory building $ 160,000 Appraised value of land $ 270,000 Number of shares issued…
Jamaica Corp. organized on June 1,2020, was authorized to issue shares as follows: 9%, 800,000, P100 par, convertible preference shares 2,000,000, P2.50 par value, ordinary shares During the remainder of the fiscal year ended May 31,2021, the following transactions were completed in the order given: 240,000 preference shares were subscribed for at P105, and 720,000 ordinary shares were subscribed for at P26. Both subscriptions were payable 30% upon subscription, the balance in one payment. The second subscription payment was received, except one subscriber for 48,000 ordinary shares defaulted on payment. The full amount paid by this subscriber was returned, and all of the fully paid shares was issued. 120,000 ordinary shares were reacquired by purchase at P28. Each preference share was converted into four ordinary shares. The treasury shares were exchanged for machinery with a fair value market value of P3,440,000. There was a 2 for 1 split and the par value of the new ordinary…