Homework Help is Here – Start Your Trial Now!
Business
Accounting
Dunne Corporation had the following stockholders’ equity amounts on January 1, 2021: Preferred Stock, 5%, $40 par, 30,000 shares authorized, 10,000 shares issued and outstanding, callable, nonparticipating $400,000 Paid in Capital in Excess of Par – Preferred Common Stock, $10 par, 2,000,000 shares authorized, 250,000 shares issued and outstanding 10,000 2,500,000 Paid in Capital in Excess of Par – Common Retained Earnings 7,000,000 _ 6,000,000 Total Stockholders’ Equity $15,910,000 Dunne completed the following chronological transactions during 2021, 2022, and 2023: a. On January 1, 2021, granted the company president 3,000 stock options. The option allows the president to buy common shares at $30 per share during 2022. These options have a total fair value of $75,000 and are to be considered compensation for two years (2021 and 2022). b. Declared and paid a cash dividend to satisfy the preferred stockholders. c. Paid the cash dividend in part “b." d. On August 1, 2021, Dunne purchased 15,000 shares of the company's own common stock for $54 per share in cash with the intention of reselling them. e. On November 1, 2021, Dunne declared a 2% stock dividend for the common stockholders when the common stock was selling for $55 per share. f. At the end of 2021, made the adjusting entry for the stock options in part “a." The common stock was now selling for $56 per share. g. At the end of 2022, made the adjusting entry for the stock options in part “a." The common stock was now selling for $58 per share. h. Early in 2023, the president exercised 2,000 of the stock options when the common stock was selling for $59 per share. INSTRUCTIONS: 1. Prepare journal entries for the above events. 2. Calculate basic earnings per share for 2021 assuming Dunne earned $900,000 of net income and had no weird items.

Dunne Corporation had the following stockholders’ equity amounts on January 1, 2021: Preferred Stock, 5%, $40 par, 30,000 shares authorized, 10,000 shares issued and outstanding, callable, nonparticipating $400,000 Paid in Capital in Excess of Par – Preferred Common Stock, $10 par, 2,000,000 shares authorized, 250,000 shares issued and outstanding 10,000 2,500,000 Paid in Capital in Excess of Par – Common Retained Earnings 7,000,000 _ 6,000,000 Total Stockholders’ Equity $15,910,000 Dunne completed the following chronological transactions during 2021, 2022, and 2023: a. On January 1, 2021, granted the company president 3,000 stock options. The option allows the president to buy common shares at $30 per share during 2022. These options have a total fair value of $75,000 and are to be considered compensation for two years (2021 and 2022). b. Declared and paid a cash dividend to satisfy the preferred stockholders. c. Paid the cash dividend in part “b." d. On August 1, 2021, Dunne purchased 15,000 shares of the company's own common stock for $54 per share in cash with the intention of reselling them. e. On November 1, 2021, Dunne declared a 2% stock dividend for the common stockholders when the common stock was selling for $55 per share. f. At the end of 2021, made the adjusting entry for the stock options in part “a." The common stock was now selling for $56 per share. g. At the end of 2022, made the adjusting entry for the stock options in part “a." The common stock was now selling for $58 per share. h. Early in 2023, the president exercised 2,000 of the stock options when the common stock was selling for $59 per share. INSTRUCTIONS: 1. Prepare journal entries for the above events. 2. Calculate basic earnings per share for 2021 assuming Dunne earned $900,000 of net income and had no weird items.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Dunne Corporation had the following stockholders' equity amounts on January 1, 2021: Preferred Stock, 5%, $40 par, 30,000 shares authorized, 10,000 shares issued and outstanding, callable, nonparticipating $400,000 Paid in Capital in Excess of Par – Preferred 10,000 Common Stock, $10 par, 2,000,000 shares authorized, 250,000 shares issued and outstanding 2,500,000 Paid in Capital in Excess of Par – Common Retained Earnings 7,000,000 6,000,000 Total Stockholders’ Equity $15,910,000 Dunne completed the following chronological transactions during 2021, 2022, and 2023: a. On January 1, 2021, granted the company president 3,000 stock options. The option allows the president to buy common shares at $30 per share during 2022. These options have a total fair value of $75,000 and are to be considered compensation for two years (2021 and 2022). b. Declared and paid a cash dividend to satisfy the preferred stockholders. c. Paid the cash dividend in part “b." d. On August 1, 2021, Dunne purchased 15,000 shares of the company's own common stock for $54 per share in cash with the intention of reselling them. e. On November 1, 2021, Dunne declared a 2% stock dividend for the common stockholders when the common stock was selling for $55 per share. f. At the end of 2021, made the adjusting entry for the stock options in part "a." The common stock was now selling for $56 per share. g. At the end of 2022, made the adjusting entry for the stock options in part "a." The common stock was now selling for $58 per share. h. Early in 2023, the president exercised 2,000 of the stock options when the common stock was selling for $59 per share. INSTRUCTIONS: 1. Prepare journal entries for the above events. 2. Calculate basic earnings per share for 2021 assuming Dunne earned $900,000 of net income and had no weird items.
Transcribed Image Text:Dunne Corporation had the following stockholders' equity amounts on January 1, 2021: Preferred Stock, 5%, $40 par, 30,000 shares authorized, 10,000 shares issued and outstanding, callable, nonparticipating $400,000 Paid in Capital in Excess of Par – Preferred 10,000 Common Stock, $10 par, 2,000,000 shares authorized, 250,000 shares issued and outstanding 2,500,000 Paid in Capital in Excess of Par – Common Retained Earnings 7,000,000 6,000,000 Total Stockholders’ Equity $15,910,000 Dunne completed the following chronological transactions during 2021, 2022, and 2023: a. On January 1, 2021, granted the company president 3,000 stock options. The option allows the president to buy common shares at $30 per share during 2022. These options have a total fair value of $75,000 and are to be considered compensation for two years (2021 and 2022). b. Declared and paid a cash dividend to satisfy the preferred stockholders. c. Paid the cash dividend in part “b." d. On August 1, 2021, Dunne purchased 15,000 shares of the company's own common stock for $54 per share in cash with the intention of reselling them. e. On November 1, 2021, Dunne declared a 2% stock dividend for the common stockholders when the common stock was selling for $55 per share. f. At the end of 2021, made the adjusting entry for the stock options in part "a." The common stock was now selling for $56 per share. g. At the end of 2022, made the adjusting entry for the stock options in part "a." The common stock was now selling for $58 per share. h. Early in 2023, the president exercised 2,000 of the stock options when the common stock was selling for $59 per share. INSTRUCTIONS: 1. Prepare journal entries for the above events. 2. Calculate basic earnings per share for 2021 assuming Dunne earned $900,000 of net income and had no weird items.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for stockholder's equity
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS