Accounting Cherry Corporation had 600,000 shares of common stock outstanding during 2020. In addition, it had 80,000 stock options outstanding, which had been granted to certain executives on January 1, 2020, and which gave them the right to purchase shares of Cherry's stock at an option price of $40 per share. The average market price of Cherry's common stock for 2020 was $50. Net income was $1,000,000. a. Compute EPS. b. Compute DEPS. c. Compute DEPS assuming that the options were granted on September 1, 2020, not January 1. SHOW ALL WORK. Round to the nearest penny.

Accounting Cherry Corporation had 600,000 shares of common stock outstanding during 2020. In addition, it had 80,000 stock options outstanding, which had been granted to certain executives on January 1, 2020, and which gave them the right to purchase shares of Cherry's stock at an option price of $40 per share. The average market price of Cherry's common stock for 2020 was $50. Net income was $1,000,000. a. Compute EPS. b. Compute DEPS. c. Compute DEPS assuming that the options were granted on September 1, 2020, not January 1. SHOW ALL WORK. Round to the nearest penny.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following activities relate to Merrill Company during the years 2018 and 2019: 2018: Feb. 15 Merrill purchased 10,000 shares of Hendershot Equipment stock for $40 per share. Dec. 1 Merrill received an $0.80-per-share cash dividend from Hendershot Equipment. Dec. 31 Hendershot Equipment common stock had a closing market price of $97 per share. Hendershot’s 2018 net income was $120,000. 2019: July 1 Merrill sold all 10,000 shares of Hendershot Equipment stock for $42 per share. Additional information: Hendershot Equipment had 50,000 shares of common stock outstanding on January 1, 2018. Required: Prepare journal entries to record the transactions assuming: a.) The securities are classified as FVTOCI financial assets-equity. b.)The equity method is used. Show the amounts that would be reported on the financial statements of Merrill Company at December 31, 2018, under each assumption. Can Merrill use the equity method to account for its investment in Hendershot Equipment?
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