In: Accounting
Naxion Corporation began operations on January 2, 2018, and had the following transactions during the year: | |||
Jan. 2 | Issued 250,000 shares of $1 par value common stock at $45 per share. Total shares authorized: 1,000,000. | ||
Feb. 5 | Issued 10,000 shares of $50 par, 5% cumulative preferred stock at $65 per share. Total shares authorized: 25,000. | ||
Mar. 15 | Issued 150,000 shares of $1 par value common stock at $35 per share. | ||
Apr. 2 | Declared a $2.50 per share cash dividend on its preferred stock to be paid on April 25. Date of record is April 10. | ||
Apr. 3 | Declared a $0.10 per share cash dividend on its common stock to be paid on April 26. Date of record is April 10. | ||
Apr. 25 | Payment of cash dividend on preferred stock. | ||
Apr. 26 | Payment of cash dividend on common stock. | ||
Jun. 1 | Declared a 2% stock dividend on all common stock outstanding. Current market price of the stock was $48 per share. Date of record is June 15. | ||
Jun. 30 | Distributed common stock dividend to shareholders. | ||
Oct. 10 | Purchased 2,500 shares of treasury stock-common at $52 per share. | ||
Nov. 15 | Sold 2,000 shares of treasury stock-common at $54 per share. |
Requirements: | |||
1 | Journalize Naxion’s transactions for 2018. | ||
2 | Prepare the stockholders' equity section of the balance sheet as of December 31, 2018, including the heading. Assume Naxion had net income of $15,000,000 during 2018. | ||
3 | Determine Naxion’s earnings per share for 2018, rounded to two decimal places. For the average number of common shares outstanding, average the number of shares outstanding on January 2 and December 31. | ||
4 | Assuming Naxion’s market value per common share as of December 31, 2018 was $55, calculate Naxion’s price/earnings ratio for 2018, rounded to two decimal places. |