Computing EPS: Simple Capital Structure and Net LossGrace Corp. had 100,000 common shares outstanding as of January 1, and declared a 1-for-2 reverse stock split on March 31. In addition, the companybought 5,000 shares for the treasury on August 31, and 2,000 shares of stock were issued on November 1 in exchange for legal services. The companyalso had 1,000 shares of 5%, $10 par, cumulative, nonconvertible preferred stock outstanding for the year. No common or preferred stock dividendswere declared during the year. The company suffered a net loss for the year of $100,000.RequiredCompute basic EPS.⚫Note: Round weighted average common shares outstanding to the nearest whole number.•Note: Use a negative sign with a loss.Calculation of Weighted Shares Outstanding:WeightedAvg. SharesInclusive DatesOutstandingJan. - Mar.100,000 xApr. - Aug.0 xSept. - Oct.0 xNov. - Dec.48,000 x148000Basic EPS $Numerator(100,500)DenominatorPer Share48,000 x = $-2.09

A company's net income less preferred dividends is its earnings per share (EPS), which is then…

Answered: Grace Corp. had 100,000 common shares…

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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When Ale Co. started operating in Year 1, it issued 750,000 shares of common stock. In Year 2, the company issued 50,000 more shares of common stock and 100,000 shares of preferred stock (with each preferred share convertible into one common share). In Year 3, 40 percent of the preferred shares were converted into common shares. At the end of Year 3, the company underwent a 4-for-1 stock split. Determine the total number of outstanding common stock shares at the end of Year 3.
Calgate Company had the following shares outstanding and retained earnings at the end of the current year: Preferred shares, 4% (par value $30; outstanding, 11,500 shares) Common shares (outstanding, 45,000 shares) Retained earnings The board of directors is considering the distribution of a cash dividend to the two groups of shareholders. No dividends were declared during the previous two years. Three independent cases are assumed: Case A: The preferred shares are non-cumulative; the total amount of dividends is $54,000. Case B: The preferred shares are cumulative; the total amount of dividends is $75,000. Case C: Same as case B, except the amount is $103,500. Required: 1. Compute the amount of dividends, in total and per share, that would be payable to each class of shareholders for each case. (Round "Per share" to 2 decimal places.) Case A: Total Per share Case B: Total Per share $ 345,000 675,000 170,000 Case C: Total Per share Preferred Shares Common Shares
Chicago Company reported the following information at the end of the current year: Common stock ($10 par value; 48,000 shares outstanding) Preferred stock, 15% ($15 par value; 9,500 shares outstanding) Retained earnings The board of directors is considering the distribution of a cash dividend to the two groups of stockholders. No dividends were declared during the previous two years. Assume the three cases below are independent of each other. Case A: The preferred stock is noncumulative; the total amount of all dividends is $38,500. Case B: The preferred stock is cumulative; the total amount of all dividends is $64,125. Case C: The preferred stock is cumulative; the total amount of all dividends is $91,500. Required: 1. Compute the amount of dividends, in total and per share, that would be payable to each class of stockholders for each case. 2. Assume Chicago Company issued a 15 percent common stock dividend on the outstanding shares when the market value per share was $39. Fill in the…
Prior to May 1, Fortune Company has never had any treasury stock transactions. The company repurchased 230 shares of its common stock on May 1 for $11,500. On July 1, it reissued 115 of these shares at $53 per share. On August 1, it reissued the remaining treasury shares at $48 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2? Multiple Choice O O $11,615. $6,095. $15,410. $115. $0.
On September 1, Ziegler Corporation had 71,000 shares of $5 par value common stock, and $213,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The general journal entry to record this transaction is: Multiple Choice Debit Retained Earnings $355,000; credit Common Stock $355,000. Debit Retained Earnings $1,065,000; credit Common Stock Split Distributable $1,065,000. No entry is made for this transaction. Debit Retained Earnings $1,065,000; credit Common Stock $1,065,000. Debit Retained Earnings $355,000; credit Stock Split Payable $355,000.
On January 1, Vermont Corporation had 46,400 shares of $9 par value common stock issued and outstanding. All 46,400 shares had been issued in a prior period at $22 per share. On February 1, Vermont purchased 1,010 shares of treasury stock for $24 per share and later sold the treasury shares for $22 per share on March 1. The journal entry to record the purchase of the treasury shares on February 1 would include a
On September 1, Reedy Company has 500,000 shares of $30 par value ($330 market value) common stock that are issued and outstanding. Its balance sheet on that date shows the following account balances relating to its common stock: Common stock 15,000,000 Paid-in capital in excess of par value 9,000,000 On September 2, Reedy splits its stock 3-for-2 and reduces the par value to $20 per share. How many shares of common stock are issued and outstanding immediately after the stock split? a. 500,000 shares b. 333,333 shares C. 750,000 shares d. 15,000,000 shares
On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 100 million, $5.00 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $31 on June 13. Prepare the journal entry to record the stock split if it is to be effected in the form of a 100% stock dividend. What is the par per share after the split? Complete this question by entering your answers in the tabs below. General Journal Par value Prepare the journal entry to record the stock split if it is to be effected in the form of a 100% stock dividend. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet 1 Record the stock split effected in the form of a 100% stock dividend. 4>
Dengar
The following cases are independent. Case A Jethrow Ltd. had 1,700,000 common shares outstanding on 1 January 20x2. • On 27 February 207,000 shares were issued for $57 each.. • 307,000 shares were issued on 1 August. A 2-for-1 stock split was distributed on 30 August. Case B On 1 January 20X7, Doomsday Corp. had 207,000 nonvoting Series A shares and 607,000 Series 8 voting shares outstanding. Series A shares have a $3 per share cumulative dividend paid quarterly and are convertible into two Series B shares at any time after 31 December 20x9. On 1 October 20x7, 30,700 Series A shares were converted to B shares. ⚫ On 1 December 20x7, 79,000 Series 8 shares were retired for cash. Required: For each case, calculate the number of weighted-average ordinary shares to use in the calculation of basic EPS. Assume a 31 December year-end. (Do not round Intermediate calculations. Round your answers to the nearest whole number.) Number of shares Case A Case B 2,738,417 615,767
A company issues 10,000 shares of its own $10 par value common stock to the public for $19 per share. Later, 1, 000 of these shares are bought for $21 per share as treasury stock. Which of the Losses on the resale of these shares would impact reported net income for the year although gains would not The par value method and the cost method have the same total impact on stockholders equity Because this is a stock transaction, retained earnings cannot be affected by a re - issuance of these shares
When Crossett Corporation was organized in January Year 1, it immediately issued 4,700 shares of $48 par, 8 percent, cumulative preferred stock and 12,000 shares of $8 par common stock. Its earnings history is as follows: Year 1, net loss of $12,700; Year 2, net income of $58,700; Year 3, net income of $119,700. The corporation did not pay a dividend in Year 1. b. Assume that the board of directors declares a $55,596 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? (Amounts to be deducted should be indicated with minus sign.)

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