11) Amber Inc has 200,000 shares of $10-par common stock outstanding and 4,000 shares of $50-par 8% convertible preferred stock outstanding. For 2024, Amber reported net income of $700,000 after deducting income taxes at a 30% rate. If each share of preferred stock is convertible into 1 share of common stock, what would Amer report for diluted earnings per share? A $3.42 B $3.43 C D $3.35 $0.00 12) Yellow Co foresees the possibility of being unsuccessful in a lawsuit that may result in incurring a major loss associated with its related liability. Which of the following is correct? A If it is remote, and a guarantee was given, a disclosure is necessary, but not an accrual. B If it is probable, a disclosure is necessary, but not an accrual. с If it is probable, an accrual is necessary but not a disclosure. D If it is reasonably possible, neither accrual nor disclosure is necessary. 13) On Jan 1, Year 1, White Co grants its three top employees, Mr. Blue, Ms. Orange, and Mrs. Green, 3,000 options each to purchase its $10-par common stock. Each option allows the purchase of 10 shares at $25 per share during Years 3 and 4. In order for these options to be exercisable, each of the top employees must demonstrate a high level of performance during years 1 and 2. The fair market value of these options was $90,000. At that grant date, Mr. Blue declined the offer. How much will White record for compensation expense each year for years 1 and 2? A B $375,000 $30,000 C D $250,000 $45,000 14) When a stock dividend is declared how are the components of stockholders' equity affected? 10% stock dividend A Retained earnings decreases at same amount capital stock decreases B Retained earnings increases more than capital stock increases Retained earnings decreases C more than capital stock increases Retained earnings decreases D at same amount capital stock increases 40% stock dividend Retained earnings decreases more than capital stock decreases Retained earnings increases at same amount capital stock increases Retained earnings decreases at same amount capital stock increases Retained earnings decreases more than capital stock increases 15) Which of the following would consider the lease an operating lease? A B с D Leasing for 3 years a machine with a useful life of 5 years to be returned to the lessor when the lease ends. Leasing a large and intricate slicing line that is custom made to specifications prescribed by the lessee. Leasing a machine with a fair value of $100,000 and the present value of the lease payments is $80,000. Leasing for 4 years a machine with a useful life of 8 years to be transferred to the lessee when the lease ends.

11) Amber Inc has 200,000 shares of $10-par common stock outstanding and 4,000 shares of $50-par 8% convertible preferred stock outstanding. For 2024, Amber reported net income of $700,000 after deducting income taxes at a 30% rate. If each share of preferred stock is convertible into 1 share of common stock, what would Amer report for diluted earnings per share? A $3.42 B $3.43 C D $3.35 $0.00 12) Yellow Co foresees the possibility of being unsuccessful in a lawsuit that may result in incurring a major loss associated with its related liability. Which of the following is correct? A If it is remote, and a guarantee was given, a disclosure is necessary, but not an accrual. B If it is probable, a disclosure is necessary, but not an accrual. с If it is probable, an accrual is necessary but not a disclosure. D If it is reasonably possible, neither accrual nor disclosure is necessary. 13) On Jan 1, Year 1, White Co grants its three top employees, Mr. Blue, Ms. Orange, and Mrs. Green, 3,000 options each to purchase its $10-par common stock. Each option allows the purchase of 10 shares at $25 per share during Years 3 and 4. In order for these options to be exercisable, each of the top employees must demonstrate a high level of performance during years 1 and 2. The fair market value of these options was $90,000. At that grant date, Mr. Blue declined the offer. How much will White record for compensation expense each year for years 1 and 2? A B $375,000 $30,000 C D $250,000 $45,000 14) When a stock dividend is declared how are the components of stockholders' equity affected? 10% stock dividend A Retained earnings decreases at same amount capital stock decreases B Retained earnings increases more than capital stock increases Retained earnings decreases C more than capital stock increases Retained earnings decreases D at same amount capital stock increases 40% stock dividend Retained earnings decreases more than capital stock decreases Retained earnings increases at same amount capital stock increases Retained earnings decreases at same amount capital stock increases Retained earnings decreases more than capital stock increases 15) Which of the following would consider the lease an operating lease? A B с D Leasing for 3 years a machine with a useful life of 5 years to be returned to the lessor when the lease ends. Leasing a large and intricate slicing line that is custom made to specifications prescribed by the lessee. Leasing a machine with a fair value of $100,000 and the present value of the lease payments is $80,000. Leasing for 4 years a machine with a useful life of 8 years to be transferred to the lessee when the lease ends.

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 3P: On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a...

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