Lerner. Inc. had the following transactions in 2017, its first year of operations: 1. Issued 22,000 shares of common stock. The stock has a par value of $2.00 per share and was issued at $18.00 per share. 2. Issued 1,100 shares of $200 par value preferred stock at par. 3. Earned net income of $37,000. 4. Paid no dividends. At the end of 2017, what is total stockholders' equity? a. $352,000 b. $264,000 c. $653,000 d. $616,000

Lerner. Inc. had the following transactions in 2017, its first year of operations: 1. Issued 22,000 shares of common stock. The stock has a par value of $2.00 per share and was issued at $18.00 per share. 2. Issued 1,100 shares of $200 par value preferred stock at par. 3. Earned net income of $37,000. 4. Paid no dividends. At the end of 2017, what is total stockholders' equity? a. $352,000 b. $264,000 c. $653,000 d. $616,000

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 4CPP: Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31,...

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Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 0 par common stock at 0, receiving cash. b. Issued 4,000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 375. The bonds are classified as a held- to-maturitv long-term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0.60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 545, including commission. p. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method, q. Accrued interest for three months on the Dream Inc. bonds purchased in (1). r. Pinkberry Co. recorded total earnings of 240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39.02 per share on December 31, 2016. The investment is adjusted to fair value, using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero. Instructions Journalize the selected transactions. After all of the transactions for the year ended December 31, 2016, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step income statement for the year ended December 31, 2016, concluding with earnings per share. In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. (Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 2016. c. Prepare a balance sheet in report form as of December 31, 2016. Income statement data: Advertising expense 150,000 Cost of merchandise sold 3,700,000 Delivery expense 30,000 Depreciation expense -office buildings and equipment 30,000 Depreciation expensestore buildings and equipment 100,000 Dividend revenue 4,500 Gain on sale of investment 4,980 Income from Pinkberry Co. investment 76,800 Income tax expense 140,500 Interest expense 21,000 Interest revenue 2,720 Miscellaneous administrative expense 7.500 Miscellaneous selling expense 14,000 Office rent expense 50,000 Office salaries expense 170,000 Office supplies expense 10,000 Sales 5,254,000 Sales commissions 185,000 Sales salaries expense 385,000 Store supplies expense 21,000 Retained earnings and balance sheet data: Accounts payable 194,300 Accounts receivable 545,000 Accumulated depreciationoffice buildings and equipment 1,580,000 Accumulated depreciationstore buildings and equipment 4,126,000 Allowance for doubtful accounts 8,450 Available for sale investments (at cost) 260,130 Bonds payable. 5%. due 2024 500,000 Cash 246,000 Common stock, 20 par (400,000 shares authorized; 100,000 shares issued. 94,600 outstanding) 2,000,000 Dividends: Cash dividends for common stock 155,120 Cash dividends for preferred stock 100,000 Goodwill 500,000 Income tax payable 44,000 Interest receivable 1,125 Investment in Pinkberry Co. stock (equity method) 1,009,300 Investment in Dream Inc. bonds (long term) 90,000 Merchandise inventory [December 31, 2016). at lower of cost (FIFO) or market 778,000 Office buildings and equipment 4.320,000 Paid-in capital from sale of treasury stock 13,000 Excess of issue price over parcommon stock 886,800 Excess of issue price over parpreferred stock 150,000 Preferred 5% stock. 80 par (30,000 shares authorized; 20,000 shares issued] 1,600,000 Premium on bonds payable 19,000 Prepaid expenses 27,400 Retained earnings, January 1, 2016 9,319,725 Store buildings and equipment 12,560,000 Treasury stock (5,400 shares of common stock at cost of 33 per share) 178,200 Unrealized gain (loss) on available for sale investments (6,500) Valuation allowance for available for sale investments (6,500)
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4,000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 375. The bonds are classified as a heldtomaturity long-term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0.60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method. q. Accrued interest for three months on the Dream Inc. bonds purchased in (l). r. Pinkberry Co. recorded total earnings of 240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39.02 per share on December 31, 2016. The investment is adjusted to fair value, using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transactions for the year ended December 31, 2016, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step income statement for the year ended December 31, 2016, concluding with earnings per share. In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. (Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 2016. c. Prepare a balance sheet in report form as of December 31, 2016.
Lerner Company had the following transactions in 2017, its first year of operations: Issued 20,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $14.00 per share Issued 1,000 shares of $100 par value preferred stock. Shares were issued at par Earned Net Income of $35,000 Paid no dividends. At the end of 2017, what is the total amount of stockholders' equity? (Remember that we have TWO Stockholder's Equity accounts) A $ 260,000.00 B $ 415,000.00 C $ 380,000.00 D $ 120,000.00
Crystal Arts, Inc., had earnings of $291,600 for 2016. The company had 30,000 shares of common stock outstanding during the year. In addition, the company issued 1,800 shares of $150 par value preferred stock on January 3, 2016. The preferred stock has a dividend of $7 per share. There were no transactions in either common or preferred stock during 2016. Determine the basic earnings per share for Crystal Arts. Round answer to two decimal places.
Belton, Inc. had the following transactions in 2018, its first year of operations: Issued 37,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $21.00 per share. Earned net income of $72,000. Paid no dividends. At the end of 2018, what is the total amount of paid-in capital? A. $777,000 B. $37,000 C. $849,000 D. $72,000
Carla Corporation reported net income of $644,000 in 2017 and had 234,000 shares of common stock outstanding throughout the year. Also outstanding all year were 63,300 options to purchase common stock at $10 per share. The average market price of the stock during the year was $15. Compute diluted earnings per share. (Round answer to 2 decimal places, e.g. 15.25.)
Waterway Corporation reported net income of $643,000 in 2017 and had 244,000 shares of common stock outstanding throughout the year. Also outstanding all year were 61,500 options to purchase common stock at $8 per share. The average market price of the stock during the year was $12. Compute diluted earnings per share. (Round answer to 2 decimal places, e.g. 15.25.)
Lamar Company had the following transactions in 2013, its first year of operations. • Issued 20,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $14.00 per share. • Issued 1,000 shares of $100 par value preferred stock. Shares were issued at par. • Earned net income of $35,000. • Paid no dividends. At the end of 2013, what is the total amount of Paid-in capital? a. $415,000 b. $280,000 c. $120,000 d. $380,000
Snow Cleaners, Inc., had net income of $493,600 for its year ended December 31, 2018. During the year, the company had outstanding 64,000 shares of Preferred Stock at 12% with a $40 par value, and 37,280 shares of common stock with a par value of $10. Calculate the earnings per share of common stock for the year ended December 31, 2018.
Ecker Company reports $1,825,000 of net income for 2017 and declares $255,500 of cash dividends on its preferred stock for 2017. At the end of 2017, the company had 290,000 weighted-average shares of common stock. 1. What amount of net income is available to common stockholders for 2017?
Phelps, Inc. had assets of $84,556, liabilities of $18,556, and 12,778 shares of outstanding common stock at December 31, 2017. Net income for 2017 was $9,456. The company had assets of $99,361, liabilities of $22,261, 11,401 shares of outstanding common stock, and its stock was trading at a price of $10 per share at December 31, 2018. Net income for 2018 was $10,598. Required: a. Calculate EPS for 2018. b. Calculate ROE for 2018. c. Calculate the Price/Earnings Ratio for 2018. Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate EPS for 2018. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) EPS
BMS Ltd. had 2,200,000 average shares outstanding during all of 2017. During 2017, BMS also had 50,000 options outstanding with exercise prices of $17 each. The average stock price of BMS during 2017 was $21. This company also had 1,000 shares of preferred stock outstanding (10%. $100 par value) for the entire year, which are each convertible into 20 shares of common stock. If net income of the company was 500,000, what is the diluted earnings per share for 2017? A. $0.224 B. $0.220 C. $0.226 D. $0.225