Computing EPS: Contingently Issuable SharesOn January 1, to motivate top management, Reezz Inc. granted 1,000 options to purchase common stock at $10 pershare to key officers if net income increased by 5% over the prior year. The fair value of the options on January 1 isestimated to be $5,000. Reezz Inc. reported net income of $50,000 for the year, which represented a 7% increase over theprior year. How will the options affect the denominator in the calculation of the company's diluted earnings per share?Increase→ the denominator ♦ by0x shares.

Earnings per share (EPS) is a financial metric that indicates the amount of a company's net income…

Answered: Computing EPS: Contingently Issuable…

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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● On January 1, Vermont Corporation had 46,700 shares of $10 par value common stock issued and outstanding. All 46,700 shares had been issued in a prior period at $22 per share. On February 1, Vermont purchased 990 shares of treasury stock for $28 per share and later sold the treasury shares for $20 per share on March 1. The journal entry to record the purchase of the treasury shares on February 1 would include a O debit to Treasury Stock for $27,720. O credit to a gain account for $5,940. O credit to Treasury Stock for $27,720. O debit to a loss account for $5,940.
During its first year of operations, Cupola Fan Corporation issued 48,000 of $1 par Class B shares for $475,000 on June 30, 2021. Share issue costs were $3,300. One year from the issue date (July 1, 2022), the corporation retired 10% of the shares for $48,500. Required: 1. to 4. Prepare the journal entries to record the issuance of the shares, the declaration of a $2.70 per share dividend on December 1, 2021, the payment of the dividend on December 31, 2021 and the retirement of the shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) please dont give answer in the image format
California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $20 per share. Later in the year, the company decides to purchase 100 shares at a cost of $23 per share. Record the transaction if California Surf resells the 100 shares of treasury stock at $25 per share. Record the sale of treasury stock.
What is the balance of the share capital as of year-end?
Recording Shares Issued through an Employee Share Purchase Plan Rice Corporation has a stock purchase plan with the following provision. Each full-time employee with a minimum of one year’s service may acquire from Rice Corporation, its common stock, $10 par, through payroll deductions at 5% below the market price on the date selected by the employee for a stock purchase (the exercise date). The exercise decision must be made within one year from the payroll deduction date. Employee Adams signed a payroll deduction agreement form on January 1, 2020, for $48 per month. At that date, the market price of the stock was $27 per share. At the end of 2020, Adams requested that stock be purchased equal to the amount Adams accumulated as a deposit. At that date, the market price of the stock was $25 per share. Required Prepare the journal entry on December 31, 2020, for the issuance of shares to Adams. Hint: The company credited Liability—Employee Stock Purchase Plan at the time of each payroll…
Use the following information for the next three (3) questions: At the beginning of current year, Axed Company was authorized to issue share capital of 100,000 shares with P30 par value. Axed had the following share capital transactions during the year: January 1 Issued 80,000 shares at P70 per share May 1 Reacquired 4,000 treasury shares at P65 per share July 1 Approved a share split of 5 for 1 October 31 Issued a 10% share dividend when the market value of a share is P25 December 31 Reissued all of the treasury shares at P35 December 31 Net income for the year was P4,500,000. What total amount should be reported as share premium at year-end?
On January 2, Year 1, Torres Corporation issued 25,000 shares of $20 par-value common stock for $25 per share. Which of the following statements is true? Multiple Choice The Common Stock account will increase by $625,000. The Cash account will increase by $500,000. Total stockholders' equity will increase by $500,000. The Paid-in Capital in Excess of Par Value account will increase by $125,000.
Mt. Everest Company has $1,000,000 shares of 10%, $20 Par Value Preferred Stock outstanding. On December 1st, the Board of Directors declares a 4% Stock Dividend to be issued to the shareholders of record on December 15th and distributed on December 30th. The market price of the stock on December 1st was $25 per share. Calculate the amount the Company would Debit to Stock Dividends on December 15th:Calculate the amount the Company would Credit to Additional Paid-in Capital…Preferred Stock on December 15:
PROBLEM 1: Mr. Queen Company is authorized to issue 80,000 ordinary shares. During the current year, the company issued 25,000 shares. REQUIRED: Prepare the required entry to record the issuance of the ordinary shares under each of the following assumptions: The shares are no-par but have a stated value of P10. The total issue price was P850,000. The shares are no-par and have no stated value. They were issued to a lawyer in exchange for services rendered in connection with the organization of the corporation. The lawyer would normally charge P70,000 for these services. There is no reasonable way to determine 1. 2. the fair market value of the stock.
Computing EPS: Contingently Issuable Shares On January 1, to motivate top management, Resume Inc. granted 800 options to purchase common stock at $10 per share to key officers if net income increased by 5% over the prior year. The fair value of the options on January 1 is estimated to be $4,000. Resume Inc. reported net income of $40,000 for the year, which represented a 7% increase over the prior year. How will the options affect the calculation of the company's diluted earnings per share? Increase the denominator My 0x shares Check
What is the journal entry for each date

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