Austin Motor Works declared and distributed a 5% stock dividend in 2022 when the stock was selling for $18 per share. There were 6,000,000 shares outstanding at the time of the dividend declaration. The controller recorded the distribution at par value ($1 per share) resulting in a debit to Dividends and a credit to Common Stock for $300,000. Upon review in early 2023 when the 2022 books were still open, the CFO made which of the following correcting entries? (Abbreviations used: APIC = Additional Paid-In Capital) Group of answer choices Dividends 5,100,000 Common Stock 5,100,000 APIC in Excess of Par-Common 5,100,000 Common Stock5,100,000 Dividends 5,100,000 APIC in Excess of Par-Common 5,100,000 He made no entry because the controller was correct.

Austin Motor Works declared and distributed a 5% stock dividend in 2022 when the stock was selling for $18 per share. There were 6,000,000 shares outstanding at the time of the dividend declaration. The controller recorded the distribution at par value ($1 per share) resulting in a debit to Dividends and a credit to Common Stock for $300,000. Upon review in early 2023 when the 2022 books were still open, the CFO made which of the following correcting entries? (Abbreviations used: APIC = Additional Paid-In Capital) Group of answer choices Dividends 5,100,000 Common Stock 5,100,000 APIC in Excess of Par-Common 5,100,000 Common Stock5,100,000 Dividends 5,100,000 APIC in Excess of Par-Common 5,100,000 He made no entry because the controller was correct.

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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Lyon Company shows the following condensed income statement information for the year ended December 31, 2019: Lyon declared dividends of 6,000 on preferred stock and 17,280 on common stock. At the beginning of 2019, 10,000 shares of common stock were outstanding. On May 1, 2019, the company issued 2,000 additional common shares, and on October 31, 2019, it issued a 20% stock dividend on its common stock. The preferred stock is not convertible. Required: 1. Compute the 2019 basic earnings per share. 2. Show the 2019 income statement disclosure of basic earnings per share. 3. Draft a related note to accompany the 2019 financial statements.
Anoka Company reported the following selected items in the shareholders equity section of its balance sheet on December 31, 2019, and 2020: In addition, it listed the following selected pretax items as a December 31, 2019 and 2020: The preferred shares were outstanding during all of 2019 and 2020; annual dividends were declared and paid in each year. During 2019, 2,000 common shares were sold for cash on October 4. During 2020, a 20% stock dividend was declared and issued in early May. At the end of 2019 and 2020, the common stock was selling for 25.75 and 32.20, respectively. The company is subject to a 30% income tax rate. Required: 1. Prepare the comparative 2019 and 2020 income statements (multiple-step), and the related note that would appear in Anokas 2020 annual report. 2. Next Level Compute the price/earnings ratio for 2020. How does this compare to 2019? Why is it different?
Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares of 10%, 100 par, nonconvertible preferred stock outstanding, on which the years dividends had been paid. At the beginning of 2019, the company had 7,000 shares of common stock outstanding. On April 2, 2019, the company issued another 2,000 shares of common stock so that 9,000 common shares were outstanding at the end of 2019. Common dividends of 17,000 had been paid during 2019. At the end of 2019, the market price per share of common stock was 17.50. Required: 1. Compute Mononas basic earnings per share for 2019. 2. Compute the price/earnings ratio for 2019.
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