1010Exercise 1-23 (Static) Reporting Income LO 1-5On July 1, 20x2, Alan Enterprises merged with Terry Corporation through an exchange of stock and the subsequent liquidation ofTerry, Alan issued 200,000 shares of its stock to effect the combination. The book values of Terry's assets and liabilities were equal totheir fair values at the date of combination, and the value of the shares exchanged was equal to Cherry's book value. Informationrelating to income for the companies is as follows:Net IncomeAlan EnterprisesTerry Corporation20x1$4,460,0001,300,000Net incomeEamings per shareAlan Enterprises had 1,000,000 shares of stock outstanding prior to the combination. Remember that when calculating earnings pershare (EPS) for the year of the combination, the shares issued in the combination were not outstanding for the entire year2001January 1-June 10, 20x2$2,500,000492.000Required:Compute the net income and earnings-per-share amounts that would be reported in Alan's 20X2 comparative income statements forboth 20x2 and 20X1.Note: Round earnings per share to 2 decimal places.July 1-ecember 31,20x21.528.00020x2

Solution: Computation of net income and Earnings per share for 20X2: Net income = $ 2,500,000 + $…

On July 1, 20x2, Alan Enterprises merged with Terry Corporation through Terry Alan issued 200,000 shares of its stock to effect the combination. The book values of Terry's assets and liabilities were equal to their fair values at the date of combination, and the value of the shares exchanged was equal to Cherry's book value. Information relating to income for the companies is as follows Net Income Alan Enterprises Terry Corporation 2001 4,460,000 1,300,000 Net income Eamings per share Alan Enterprises had 1,000,000 shares of stock outstanding prior to the combination. Remember that when calculating earnings per share (EPS) for the year of the combination, the shares issued in the combination were not outstanding for the entire year 20x1 January 1-June 10, 2082 $2,500,000 492.000 Required: Compute the net income and earnings-per-share amounts that would be reported in Alan's 20x2 comparative income statements for both 20X2 and 20X1. Note: Round earnings per share to 2 decimal places. July 1-December 31, 1.538.000 20x2

On July 1, 20x2, Alan Enterprises merged with Terry Corporation through Terry Alan issued 200,000 shares of its stock to effect the combination. The book values of Terry's assets and liabilities were equal to their fair values at the date of combination, and the value of the shares exchanged was equal to Cherry's book value. Information relating to income for the companies is as follows Net Income Alan Enterprises Terry Corporation 2001 4,460,000 1,300,000 Net income Eamings per share Alan Enterprises had 1,000,000 shares of stock outstanding prior to the combination. Remember that when calculating earnings per share (EPS) for the year of the combination, the shares issued in the combination were not outstanding for the entire year 20x1 January 1-June 10, 2082 $2,500,000 492.000 Required: Compute the net income and earnings-per-share amounts that would be reported in Alan's 20x2 comparative income statements for both 20X2 and 20X1. Note: Round earnings per share to 2 decimal places. July 1-December 31, 1.538.000 20x2

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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SUBJECT : Accounting
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