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EPS; stock dividend; nonconvertible
• LO19–5 through LO19–8
(Note: This is a variation of E 19–16, modified to include the exercise of stock options.)
On December 31, 2017, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 24 million shares of its common stock as
Also outstanding at December 31 were 30 million incentive stock options granted to key executives on September 13,
2013. The options were exercisable as of September 13, 2017, for 30 million common shares at an exercise price of $56 per share. During 2018, the market price of the common shares averaged $70 per share.
The options were exercised on September 1, 2018.
Required:
Compute Berclair’s basic and diluted earnings per share for the year ended December 31, 2018.
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Chapter 19 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
- 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.arrow_forwardStock 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.arrow_forwardCalculating the Number of Shares Issued Castanet Inc. issued shares of its $1. 50 par value common stock on November 9,2019, for $13 per share. In recording the issuance of the stock, Castanet credited the Additional Paid-In Capital- Common Stock account for $416,300. Required: How many shares were issued on November 9, 2019?arrow_forward
- Required information Problem 8-24 (Algo) Common and preferred stock-issuances and dividends LO 1, 2 [The following information applies to the questions displayed below.] Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: • 1,100,000 shares of no-par common stock were authorized; 342,000 shares were issued on January 1, 2019, at $26 per share. • 381,000 shares of $90 par value, 9.10% cumulative, preferred stock were authorized; 132,000 shares were issued on January 1, 2019, at $128 per share. • No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt Corp. declared dividends of $6,260,000, payable on February 12, 2022, to holders of record as of January 8, 2022. Problem 8-24 (Algo) Part c c. Calculate the common stock dividends per share declared during 2021. (Round your answer to 2 decimal places.) Common stock dividends per sharearrow_forwardExercise 19-19 (Algo) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold; stock options; convertible bonds [LO19-5,19-6, 19-7, 19-8, 19-9] On December 31, 2020, Berclair Inc. had 280 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $250 million. The income tax rate is 25%. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2016. The options are exercisable as of September 13, 2020, for 30 million common shares at an exercise price of $56 per share. During 2021, the market price of the common shares averaged $70 per share. In 2017, $50.0 million of 8% bonds, convertible…arrow_forwardRequired information Problem 8-24 (Algo) Common and preferred stock-issuances and dividends LO 1, 2 [The following information applies to the questions displayed below] Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: • 1100.000 shares of no-par common stock were authorized; 277,000 shares were issued on January 1, 2019, at $31 per share. . 447,000 shares of $100 par value, 10.00% cumulative, preferred stock were authorized; 126.000 shares were issued on January 1, 2019, at $125 per share. • No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt Corp, declared dividends of $6,120.000, payable on February 12, 2022, to holders of record as of January 8, 2022. Problem 8-24 (Algo) Part c c. Calculate the common stock dividends per share declared during 2021. (Round your answer to 2 decimal places.) Common stock dividends per share Movt >arrow_forward
- Exercise 19-12 (Algo) EPS; shares issued; stock dividend [LO19-5, 19-6] For the year ended December 31, 2021, Norstar Industries reported net income of $985,000. At January 1, 2021, the company had 1,150,000 common shares outstanding. The following changes in the number of shares occurred during 2021: Apr. 30 Sold 105,000 shares in a public offering. May 24 Declared and distributed a 5% stock dividend. June 1 Issued 120,000 shares as part of the consideration for the purchase of assets from a subsidiary. Required: Compute Norstar's earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Round "EPS" answer to 2 decimal places. Do not round intermediate calculations.) Numerator Denominator Earnings per Share %3D %3Darrow_forwardPrint by: Tanvi Varma374275:374275: Intermediate Accounting Theory and Practice MGMT X 120B (Summer 2020) / Ch. 15 HW *Exercise 15-18 Nash Company reported the following amounts in the stockholders’ equity section of its December 31, 2019, balance sheet. Preferred stock, 9%, $100 par (10,000 shares authorized, 1,800 shares issued) $180,000 Common stock, $5 par (96,000 shares authorized, 19,200 shares issued) 96,000 Additional paid-in capital 113,000 Retained earnings 449,000 Total $838,000 During 2020, Nash took part in the following transactions concerning stockholders’ equity. 1. Paid the annual 2019 $9 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2019. 2. Purchased 1,800 shares of its own outstanding common stock for $42 per share. Nash uses the cost method. 3. Reissued 800 treasury shares for land valued at $34,500. 4.…arrow_forwardExercise 19-19 (Algo) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold; stock options; convertible bonds [LO19-5,19-6, 19-7, 19-8, 19-9] On December 31, 2023, Berclair Incorporated had 480 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2024. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2024, was $750 million. The income tax rate is 25%. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2019. The options are exercisable as of September 13, 2023, for 30 million common shares at an exercise price of $56 per share. During 2024, the market price of the common shares averaged $70 per share. In 2020, $50.0 million of 8% bonds,…arrow_forward
- Book value of common stockholders' equity of FedEx, May 31, 2020 (figures in $ millions) Common shares ($0.10 par value per share) $ 30 Additional paid-in capital 3,097 23,722 (7,756) (369) $ 18,724 Retained earnings Treasury shares at cost Other Net common equity Note: Authorized shares (millions) Issued shares, of which: Outstanding shares Treasury shares Required: a. Suppose that FedEx now issues 4 million shares at $180 a share. Update the table below with the new values. b. What would happen to the book value of common stockholders' equity if instead FedEx bought back 4 million shares at $180 per share? Complete this question by entering your answers in the tabs below. Required A Required B What would happen to the book value of common stockholders' equity if instead FedEx bought back 4 million shares at $180 per share? Note: Negative amounts should be indicated by a minus sign. Enter your answers in millions rounded to 1 decimal place. Common shares ($0.10 par value per share)…arrow_forwardExercise 19-16 (Algo) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold [LO19-5, 19-6, 19-7] On December 31, 2023, Berclair Incorporated had 540 million shares of common stock and 6 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. . On March 1, 2024, Berclair purchased 12 million shares of its common stock as treasury stock. • Berclair issued a 5% common stock dividend on July 1, 2024. •. Two million treasury shares were sold on October 1. • Net Income for the year ended December 31, 2024, was $1,000 million. Required: Compute Berclair's earnings per share for the year ended December 31, 2024. Note: Do not round Intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). $ Numerator 946+ Denominator = Earnings per Share 10arrow_forwardExercise 19-19 (Static) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold; stock options; convertible bonds [LO19-5, 19-6, 19-7, 19-8, 19-9] On December 31, 2020, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $150 million. The income tax rate is 25%. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2016. The options are exercisable as of September 13, 2020, for 30 million common shares at an exercise price of $56 per share. During 2021, the market price of the common shares averaged $70 per share. In 2017, $50 million of 8% bonds, convertible…arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
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