Knight Company, a calendar-year firm with 100,000 shares of common stock outstanding at the start of the year, declares a three-for-one stock split halfway through the year. The next day, Knight issues 200,000 new shares in conjunction with the acquisition of a new plant. What is the number of shares that should be used in computing basic earnings per share for the year? Inclusive Dates January-June July - December Actual Retroactive Restatement for Stock Dividend Shares Outstanding or Stock Split 100,000 ✓ 900,000 x 3 ✔ 0 ✓ Equivalent Shares Outstanding 300,000 ✓ 200,000 x The number of shares for the basic EPS calculation is 0 Months Outstanding 6 ✔ 6 ✔ X Weighted Avg. Shares Outstanding 150,000 ✓ 100,000 x 500,000 x

Knight Company, a calendar-year firm with 100,000 shares of common stock outstanding at the start of the year, declares a three-for-one stock split halfway through the year. The next day, Knight issues 200,000 new shares in conjunction with the acquisition of a new plant. What is the number of shares that should be used in computing basic earnings per share for the year? Inclusive Dates January-June July - December Actual Retroactive Restatement for Stock Dividend Shares Outstanding or Stock Split 100,000 ✓ 900,000 x 3 ✔ 0 ✓ Equivalent Shares Outstanding 300,000 ✓ 200,000 x The number of shares for the basic EPS calculation is 0 Months Outstanding 6 ✔ 6 ✔ X Weighted Avg. Shares Outstanding 150,000 ✓ 100,000 x 500,000 x

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 1st, Admiral Nelson Company had 300,000 shares of common stock issued and outstanding. Admiral issued a 10% stock dividend on June 30th. On September 30th, 12,000 shares of common stock were reacquired as treasury stock. What is the appropriate number of shares to be used in calculating basic earnings per share for the year?
The following equity investment transactions were completed by Vintage Company during a recent year: Apr. 10 Purchased 4,400 shares of Delew Company’s common stock for a price of $50 per share plus a brokerage commission of $115. Delew Company has 220,000 shares of common stock outstanding. July 8 Received a quarterly dividend of $0.65 per share on the Delew Company investment. Sept. 10 Sold 1,200 shares for a price of $41 per share less a brokerage commission of $90. Dec. 31 At the end of the accounting period, the fair value of the remaining 3,200 shares of Delew Company’s stock was $49.53 per share.
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The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $140.000 in the current year. It also declared and paid dividends on common stock in the amount of $2.40 per share. During the current year, Sneer had 1 milion common shares authorized; 340,000 shares had been issued; and 136,000 shares were in treasury stock. The opening balance in Retained Earnings was $840,000 and Net Income for the current year was $340,000 Required: 1. Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock. 2. Using the information given above, prepare a statement of retained earnings for the year ended December 31 3. Prepare a journal entry to close the dividends account.