Concord Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended May 31, 2020, and May 31, 2021. The income from operations for the fiscal year ended May 31, 2020, was $1,738,000 and income from operations for the fiscal year ended May 31, 2021, was $2,443,000. In both years, the company incurred a 9% interest expense on $2,381,000 of debt, an obligation that requires interest-only payments for 5 years. The company experienced a loss from discontinued operations of $570,000 on February 2021. The company uses a 20% effective tax rate for income taxes. The capital structure of Concord Corporation on June 1, 2019, consisted of 986,000 shares of common stock outstanding and 19,500 shares of $50 par value, 6%, cumulative preferred stock. There were no preferred dividends in arrears, and the company had not issued any convertible securities, options, or warrants. On October 1, 2019, Concord sold an additional 501,000 shares of the common stock at $20 per share. Concord distributed a 20% stock dividend on the common shares outstanding on January 1, 2020. On December 1, 2020, Concord was able to sell an additional 805,000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred during the two fiscal years. (a) Your answer is correct. Identify whether the capital structure at Concord Corporation is a simple or complex capital structure. Simple Capital Structure
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Please help. I have tried four times (after 5 attempts, I lose all points) to determine the weighted average number of shares that Concord would use in calculating earnings per share for the fiscal year ended:
May 31, 2020
May 31, 2021
The answers I have tried but were incorrect were as follows:
2020 $1,262,200
2021 $1,429,467
2020 $1,408,000
2021 $2,153,500
2020 $1,249,733
2021 $1,376,800
2020 $1,320,000
2021 $1,889,500
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