Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000shares of common stock outstanding as of the beginning of 2024. Power Drive has the following transactions affectingstockholders' equity in 2024. Power Drive Corporation has the following beginning balances in its stockholders' equityaccounts on January 1, 2024: Common Stock, $100,000; Additional Paid - in Capital, $5,300,000; and Retained Earnings,$2,800,000. Net income for the year ended December 31, 2024, is $680,000. Required: Prepare the stockholders'equity section of the balance sheet for Power Drive Corporation as of December 31, 2024. Note: Amounts to bededucted should be indicated by a minus sign. \table[[POWER DRIVE CORPORATION], [Balance Sheet], [(Stockholders'Equity Section),], [Stockholders' Equity:,], [,], [,], [,], [Total Paid - in Capital,], [, ], [, ], [, ], [Total Stockholders' Equity,]]POWER DRIVE CORPORATIONBalance Sheet(Stockholders' Equity Section)December 31, 2024Stockholders' Equity:Total Paid-in CapitalTotal Stockholders' Equity

Power Drive Corporation, a company specializing in golf equipment and apparel, meticulously manages…

Answered: Power Drive Corporation designs and…

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

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Problem 9P

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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.
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%.
Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2024. Power Drive has the following transactions affecting stockholders' equity in 2024. March 1Issues 55,000 additional shares of $1 par value common stock for $52 per share.May 10Purchases 5,000 shares of treasury stock for $55 per share.June 1Declares a cash dividend of $1.50 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)July 1Pays the cash dividend declared on June 1.October 21Resells 2,500 shares of treasury stock purchased on May 10 for $60 per share. Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2024: Common Stock, $100,000; Additional Paid-in Capital, $4,500,000; and Retained Earnings, $2,000,000. Net income for the year ended December 31, 2024, is $600,000.Required:Prepare the statement of…
Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2024. Power Drive has the following transactions affecting stockholders' equity in 2024. March 1 Issues 64,000 additional shares of $1 par value common stock for $61 per share. May 10 Purchases 5,900 shares of treasury stock for $64 per share. June 1 Declares a cash dividend of $1.95 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Resells 2,950 shares of treasury stock purchased on May 10 for $69 per share. Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2024: Common Stock, $100,000; Additional Paid-in Capital, $5,400,000; and Retained Earnings, $2,900,000. Net income for the year ended December 31, 2024, is $690,000.
During 2021, its first year of operations, McCollum Tool Works entered into the following transactions relating to shareholders’ equity. The corporation was authorized to issue 100 million common shares, $1 par per share. Jan. 2- Issued 35 million common shares for cash. 3 - Entered an agreement with the company president to issue up to 2 million additional shares of common stock in 2022 based on the earnings of McCollum in 2022. If net income exceeds $140 million, the president will receive 1 million shares; 2 million shares if net income exceeds $150 million.Mar. 31 - Issued 4 million shares in exchange for plant facilities. Net income for 2021 was $148 million.Required:Compute basic and diluted earnings per share for the year ended December 31, 2021.
In 2022, Farmington Corporation had 2,000 outstanding stock options, where employees could purchase shares of common stock at a discounted rate of $25 per share. The common stock currently has a market value of $40 per share. Farmington has total net income for 2022 of $500,000, a tax rate of 20%, and 600,000 outstanding shares of stock (outstanding the entire year). a) What is earnings per share (EPS) b) What is dilutive earnings per share (DEP)
The following is a summary of all relevant transactions of Vicario Corporation since it was organized in 2020. In 2020, 15,000 shares were authorized and 7,000 shares of common stock ($50 par value) were issued at a price of $57. In 2021, 1,000 shares were issued as a stock dividend when the stock was selling for $60. Three hundred shares of common stock were bought in 2022 at a cost of $64 per share. These 300 shares are still in the company treasury. In 2021, 10,000 preferred shares were authorized and the company issued 5,000 of them ($100 par value) at $113. Some of the preferred stock was reacquired by the company and later reissued for $4,700 more than it cost the company. The corporation has earned a total of $610,000 in net income after income taxes and paid out a total of $312,600 in cash dividends since incorporation. Instructions Prepare the stockholders’ equity section of the balance sheet in proper form for Vicario Corporation as of December 31, 2022. Account for treasury…
During 2021, its first year of operations, McCollum Tool Works entered into the following transactions relating to shareholders’ equity. The corporation was authorized to issue 100 million common shares, $1 par per share. Jan. 2 Issued 65 million common shares for cash. 3 Entered an agreement with the company president to issue up to 2 million additional shares of common stock in 2022 based on the earnings of McCollum in 2022. If net income exceeds $130 million, the president will receive 1 million shares; 2 million shares if net income exceeds $140 million. Mar. 31 Issued 4 million shares in exchange for plant facilities. Net income for 2021 was $139 million.Required: Compute basic and diluted earnings per share for the year ended December 31, 2021
Specific Motor Inc., makes and sells commercial vehicles. By December 31, 2018, the company reported retained earnings of $306,000. Since the company needs $2,000,000 to expand its business, its Board of Directors authorized the issuance of 2,000,000 share of $1 par value common stock in December 2018. The following transactions occurred in 2019. On January 24, Specific Motor issued 500,000 shares of its $1 par-value common stock at a market value of $3 cash per share. On March 15, Specific Motor found that it understated its revenue of 2016 from a major customer, Center Inc. for a net (after tax effect) of $41,000. On June 16, Specific Motor purchased 90,000 shares of treasury stock at $6 per share. On August 7, the board of Specific Motor declared cash dividends of $0.20 for each share of common stock outstanding on that day. The date of record was set to be September 30 and the date of payment (distribution) was set to be November 4. On September 30, Specific…
Specific Motor Inc., makes and sells commercial vehicles. By December 31, 2018, the company reported retained earnings of $306,000. Since the company needs $2,000,000 to expand its business, its Board of Directors authorized the issuance of 2,000,000 share of $1 par value common stock in December 2018. The following transactions occurred in 2019. On January 24, Specific Motor issued 500,000 shares of its $1 par-value common stock at a market value of $3 cash per share. On March 15, Specific Motor found that it understated its revenue of 2016 from a major customer, Center Inc. for a net (after tax effect) of $41,000. On June 16, Specific Motor purchased 90,000 shares of treasury stock at $6 per share. On August 7, the board of Specific Motor declared cash dividends of $0.20 for each share of common stock outstanding on that day. The date of record was set to be September 30 and the date of payment (distribution) was set to be November 4. On September 30, Specific…
Specific Motor Inc., makes and sells commercial vehicles. By December 31, 2018, the company reported retained earnings of $306,000. Since the company needs $2,000,000 to expand its business, its Board of Directors authorized the issuance of 2,000,000 share of $1 par value common stock in December 2018. The following transactions occurred in 2019. On January 24, Specific Motor issued 500,000 shares of its $1 par-value common stock at a market value of $3 cash per share. On March 15, Specific Motor found that it understated its revenue of 2016 from a major customer, Center Inc. for a net (after tax effect) of $41,000. On June 16, Specific Motor purchased 90,000 shares of treasury stock at $6 per share. On August 7, the board of Specific Motor declared cash dividends of $0.20 for each share of common stock outstanding on that day. The date of record was set to be September 30 and the date of payment (distribution) was set to be November 4. On September 30, Specific…
Specific Motor Inc., makes and sells commercial vehicles. By December 31, 2018, the company reported retained earnings of $306,000. Since the company needs $2,000,000 to expand its business, its Board of Directors authorized the issuance of 2,000,000 share of $1 par value common stock in December 2018. The following transactions occurred in 2019. On January 24, Specific Motor issued 500,000 shares of its $1 par-value common stock at a market value of $3 cash per share. On March 15, Specific Motor found that it understated its revenue of 2016 from a major customer, Center Inc. for a net (after tax effect) of $41,000. On June 16, Specific Motor purchased 90,000 shares of treasury stock at $6 per share. On August 7, the board of Specific Motor declared cash dividends of $0.20 for each share of common stock outstanding on that day. The date of record was set to be September 30 and the date of payment (distribution) was set to be November 4. On September 30, Specific…

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