Chapter 11-Corporate Reporting and Analysis Homework Assignment

Murray Company reports net income of $855,500 for the year. It has no preferred stock, and its weighted-average common shares outstanding is 290,000 shares. Compute its basic earnings per share.

Net income - Preferred Dividends / Weighted-average common shares outstanding = Basic EPS 855,500 - 0 / 290,000 = 2.95 per share

Belkin Incorporated has 109,000 shares of $3 par value common stock outstanding. Belkin declares a 49% stock dividend on March 2 when the stock's market value is $81 per share. Prepare the journal entry for declaration of the stock dividend.

1 - Record the declaration of a 49% stock dividend. March 02 Retained earnings 160,230 (Debit) Common stock dividend distributable 160,230 (Credit)

On May 3, Zirbal Corporation purchased 6,500 shares of its own stock for $78,000 cash. On November 4, Zirbal reissued 1,000 shares of this treasury stock for $13,000. Prepare the May 3 and November 4 journal entries to record Zirbal's purchase and reissuance of treasury stock.

1 - Record the purchase of 6,500 shares of its own stock for $78,000 cash. May 03 Treasury stock 78,000 (Debit) Cash 78,000 (Credit) 2 - Record the reissue of 1,000 shares of this treasury stock for $13,000. November 04 Cash 13,000 (Debit) Treasury stock 12,000 (Credit) Paid-in capital, treasury stock 1,000 (Credit)

Epic Incorporated has 11,800 shares of $2 par value common stock outstanding. Epic declares a 23% stock dividend on July 1 when the stock's market value is $26 per share. The stock dividend is distributed on July 20. Prepare journal entries for (a) declaration and (b) distribution of the stock dividend.

1. Record the declaration of a 23% stock dividend. July 01 Retained earnings 70,564 (Debit) Common stock dividend distributable 5,428 (Credit) Paid-in capital in excess of par value, common stock 65,136 (Credit) 2. Record the distribution of 23% stock dividend. July 20 Common stock dividend distributable 5,428 (Debit) Common stock, $2 par value 5,428 (Credit)

Prepare journal entries to record the following transactions for Emerson Corporation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) July 15 Declared a cash dividend payable to common stockholders of $170,000. August 15 Date of record is August 15 for the cash dividend declared on July 15. August 31 Paid the dividend declared on July 15.

1. Record the declaration of a cash dividend payable to common stockholders. July 15 Retained earnings 170,000 (Debit) Common dividend payable 170,000 (Credit) 2. Record the entry on the date of record for the cash dividend of $170,000. August 15 No journal entry required 3. Record the payment of cash dividend. August 31 Common dividend payable 170,000 (Debit) Cash 170,000 (Credit)

On January 1, Payson Incorporated had a retained earnings balance of $22,000. During the year, Payson reported net income of $30,200 and paid cash dividends of $17,200. Calculate the retained earnings balance at its December 31 year-end.

22,000 + 30,200 - 17,200 = 35,000

Anthem Company has 100,000 shares authorized, 93,600 shares issued, and 21,800 shares of treasury stock. Determine the number of shares outstanding.

93600 - 21800 = 71800

Green Planet Corporation has 5,800 shares of noncumulative 12% preferred stock with a $2 par value and 21,500 shares of common stock with a $0.01 par value. During its first two years of operation, Green Planet declared and paid the following total cash dividends. Year 1 total cash dividends $820 Year 2 total cash dividends 2,150

Compute the dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Year 1 Cumulative Preferred 820 Common Stock 0 Year 2 Cumulative Preferred 1964 Common Stock 186 5,800 x .12 x 2 = 1964 (Cumulative Preferred) 2150 - 1964 = 186 (Common Stock)

Green Planet Corporation has 5,800 shares of noncumulative 12% preferred stock with a $2 par value and 21,500 shares of common stock with a $0.01 par value. During its first two years of operation, Green Planet declared and paid the following total cash dividends. Year 1 total cash dividends $820 Year 2 total cash dividends $2,150

Compute the dividends paid each year to each of the two classes of stockholders: preferred and common. Year 1 Noncumulative 820 Common Stock 0 Year 2 Noncumulative 1392 Common Stock 758 5800 x .12 x 2 = 1932 (Noncumulative) 2150 - 1392 = 758 (Common Stock)

Foxburo Company expects to pay a $3.16 per share cash dividend this year on its common stock. The current market value of Foxburo stock is $40.00 per share. Compute the expected dividend yield.If a competitor with a dividend yield of 3% is considered an income stock, would we classify Foxburo as a growth or an income stock?

Dividend Yield Compute the expected dividend yield. Annual cash dividend / market value per share 3.16 / 40 = 7.9% Dividend Classification If a competitor with a dividend yield of 3% is considered an income stock, would we classify Foxburo as a growth or an income stock? An income stock

Stockholders' equity of Ernst Company consists of 85,000 shares of $5 par value, 11% cumulative preferred stock and 305,000 shares of $1 par value common stock. Both classes of stock have been outstanding since the company's inception. Ernst did not declare any dividends in the prior year, but it now declares and pays a $150,000 cash dividend at the current year-end. Determine the amount distributed to each class of stockholders for this two-year-old company.

Number of Preferred Shares x Per Value per Preferred Share x Dividend Rate x years 85,000 x 5 x .11 x 2 = 93,500 Calculation of preferred dividend: Par Value per Preferred Share $5.00 Dividend Rate 11 Dividend per Preferred Share .55 Number of Preferred Shares 85,000 Preferred Dividend for two years 93,500 Total cash dividend $150,000 To preferred shareholders $93,500 To common shareholders $56,500

Compute Topp Company's price-earnings (PE) ratio if its common stock has a market value of $29.04 per share and its earnings per share (EPS) is $4.80. Topp's key competitor, Lower Deck, has a price-earnings (PE) ratio of 9.5. For which company does the market have higher expectations of future performance?

Price Earnings Ratio Compute Topp Company's price-earnings (PE) ratio if its common stock has a market value of $29.04 per share and its earnings per share (EPS) is $4.80. Market value per share / Earnings per share = Price Earnings Ratio 29.04 / 4.80 = 6.05 Future Performance Topp's key competitor, Lower Deck, has a price-earnings (PE) ratio of 9.5. For which company does the market have higher expectations of future performance? Lower Deck

1. Prepare the journal entry to record Tamas Company's issuance of 6,800 shares of $100 par value, 8% cumulative preferred stock for $103 cash per share. 2. Assuming the facts in part 1, if Tamas declares a year-end cash dividend, what is the amount of dividend paid to preferred shareholders? (Assume no dividends in arrears.)

Required 1 Record the issuance of 6,800 shares of $100 par value, 8% cumulative preferred stock for $103 cash per share. Cash 700,400 (Debit) Preferred stock, $100 par value 680,000 (Debit) Paid-in capital in excess of par value, preferred stock 20,400 (Credit) Required 2 Assuming the facts in part 1, if Tamas declares a year-end cash dividend, what is the amount of dividend paid to preferred shareholders? (Assume no dividends in arrears.) Par Value per Preferred Share $100 Dividend Rate 8.0% Dividend per Preferred Share $8.00 Number of Preferred Shares 6,800 Preferred Dividend $54,400 (6800 shares x $100 x .08 = $54400.)

On December 31, Westworld Incorporated has the following equity accounts and balances. Preferred Stock $9,000 Retained Earnings $ 55,000 Common Stock 3,000 Paid-In Capital in Excess of Par Value, Common Stock 41,000 Treasury Stock 4,000 Paid-In Capital in Excess of Par Value, Preferred Stock 5,000 Prepare the stockholders' equity section of Westworld's balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

Retained earnings - 5500 Preferred stock - 9000 Paid-in capital in excess of par value, Preferred Stock - 5000 Common stock - 3000 Paid-in capital in excess of par value, common stock - 4100 Treasury stock - (4000) Total stockholders' equity - 109000

Prepare the journal entry to record Zende Company's issuance of 77,000 shares of $6 par value common stock assuming the shares sell for: $6 cash per share. $7 cash per share.

a. - Record the issuance of 77,000 shares of $6 par value common stock assuming the shares sell for $6 cash per share. Debit Cash (# of shares x 1st par value) for 462,000 Credit Common Stock for $462,000. b. - Record the issuance of 77,000 shares of $6 par value common stock assuming the shares sell for $7 cash per share. Debit Cash for $539,000 (# of shares x 2nd par value), Credit Paid-in capital in Excess of par for $77,000 ( cash - common stock) Credit $462,000 Common Stock.

Prepare the journal entry to record Autumn Company's issuance of 79,000 shares of no-par value common stock assuming the shares: Sell for $33 cash per share. Are exchanged for land valued at $2,607,000.

a. Cash 2,607,000 (Debit) Common stock, no-par value 2,607,000 (Credit) b. Land 2,607,000 (Debit) Common stock, no-par value 2,607,000 (Credit)

Prepare the issuer's journal entry for each of the following separate transactions. a. On March 1, Atlantic Company issues 51,000 shares of $3 par value common stock for $323,000 cash. b. On April 1, OP Company issues no-par value common stock for $87,000 cash. c. On April 6, MPG issues 3,700 shares of $15 par value common stock for $56,000 of inventory, $170,000 of machinery, and acceptance of a $92,000 note payable.

a. Record the issuance of 51,000 shares of $3 par value common stock for $323,000 cash. Cash 323,000 (Debit) Common stock, $3 par value 153,000 (Credit) Paid-in capital in excess of par value, common stock 170,000 (Credit) b. Record the issuance of no-par value common stock for $87,000 cash. Cash 87,000 (Debit) Common stock, no-par value 87,000 (Credit) c. Record the issuance of 3,700 shares of $15 par value common stock for $56,000 of inventory, $170,000 of machinery, and acceptance of a $92,000 note payable. Inventory 56,000 (Debit) Machinery 170,000 (Debit) Note payable 92,000 (Credit) Common stock, $15 par value 55,500 (Credit) Paid-in capital in excess of par value, common stock 78,500 (Credit)

Prepare the journal entry to record Jevonte Company's issuance of 44,000 shares of its common stock assuming the shares have a: $3 par value and sell for $22 cash per share. $3 stated value and sell for $22 cash per share.

a.Record the issuance of 44,000 shares of common stock assuming the shares have a $3 par value and sell for $22 cash per share. Cash 968,000 (Debit) Common stock, $3 par value 132,000 (Credit) Paid-in capital in excess of par value, common stock 836,000 (Credit) Reason: 44,000 x 22 = 968000 44,000 x 3 = 132,000 22 - 3 = 19 x 44000 = 836,000 b. Record the issuance of 44,000 shares of common stock assuming the shares have a $3 stated value and sell for $22 cash per share. Cash 968,000 (Debit) Common stock, $3 stated value 132,000 (Credit) Paid-in capital in excess of stated value, common stock 836,000 (Credit)