Question

In: Accounting

1. All of the following normally are found in a corporation's stockholders' equity section except Select...

All of the following normally are found in a corporation's stockholders' equity section except

Select one:

a. Stock Dividend Distributable

b. Cash Dividend Payable

c. Paid-in Capital in Excess of Par Value

d. Retained Earning

All of the following normally are found in a corporation's stockholders' equity section except

Select one:

a. Stock Dividend Distributable

b. Cash Dividend Payable

c. Paid-in Capital in Excess of Par Value

d. Retained Earning

Jostens Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000 of 10% bonds outstanding during 2024. The preferred stock is convertible into 20,000 shares of common stock. During 2024, Jostens paid dividends of $1.20 per share on its common stock and $2.50 per share on its preferred stock. Each $1,000 bond is convertible into 10 shares of common stock. The net income for the year ended December 31, 2024 was $800,000. Assume the income tax rate was 30%. Diluted earnings per share for 2024 (rounded to the nearest penny) are:

Select one:

a. $3.64

b. $3.35

c. $2.94

d. $3.28

e. $3.22

Solutions

Expert Solution

Answers

1) Option b, Cash Dividend Payable

A common stock dividend distributable appears in the shareholders' equity section of a balance sheet, whereas cash dividends distributable appear in the liabilities section.

2) Option b, Cash Dividend Payable

3) Option a. $3.64

workings

Step 1: Calculate the earning left for equity shareholder

Net Income $800,000

Less: Preference Dividend (20000* $2.5) $50,000

Earnings for common share holders $750,000

Step 2: Calculate the increase earnings due to the conversion of preference shares and bonds into common stock

Particulars	Amount
Preference dividend (Step 1)	$50000
Interest saved (($1,000,000 * 10%) - ($1,000,000 * 10%) *30%)	$70,000
Total increase in the earnings	$120,000

Step 3: Calculate the weighted average common stock outstanding assuming all preference shares and bond are converted

Particulars	Amount
Common stock (given)	200,000
Preference shares converted to common stock	20,000
Bonds converted to common stock (($1,000,000 / $1,000) * 10 shares)	10,000
Total weighted average common stock outstanding	230,000

Step 4: Calculate the diluted earnings per share fro 2017 as follows:

Diluted earnings per share =

= $3.78 (rounded to $3.64)

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $10 par value, 300,000 shares authorized, 60,000 shares 600,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 960,000 From treasury stock 60,000 1,020,000 Retained earnings 696,000 2,316,000 Less: Treasury stock (6,000 shares) at cost 276,000 Total Stockholdersâ€™ Equity 2,040,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $8 par value, 300,000 shares authorized, 60,000 shares 480,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 720,000 From treasury stock 45,000 765,000 Retained earnings 522,000 1,767,000 Less: Treasury stock (6,000 shares) at cost 207,000 Total Stockholdersâ€™ Equity 1,560,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of...

The stockholders' equity section of Pats Corporation's balance sheet as of December 31, 2019 is as...

The stockholders' equity section of Pats Corporation's balance sheet as of December 31, 2019 is as follows: Stockholders' Equity Common stock, no par value; authorized, 20,000,000 shares; Issued and outstanding, 4,000,000 shares $32,000,000 Retained earnings 55,000,000 $87,000,000 The following events occurred during 2020: Jan. 15 45,000 shares of authorized and unissued common stock sold for $8 per share. Jan. 26 Declared a cash dividend of 12 cents per share, payable February 25 to stock-holders of record on February...

The stockholders' equity section of Benton Corporation's balance sheet as of December 31, 2018 is as...

The stockholders' equity section of Benton Corporation's balance sheet as of December 31, 2018 is as follows: Stockholders' Equity Common stock, $5 par value; authorized, 2,000,000 shares; issued, 400,000 shares $2,000,000 Paid-in capital in excess of par 850,000 Retained earnings 3,000,000 $5,850,000 The following events occurred from January to August during 2019: 1. Jan. 5 10,000 shares of authorized and unissued common stock were sold for $8 per share. 2. Jan. 16 Purchase back 1,000 treasury shares at $10 per...

Accounting questions : All of the following are components of stockholders’ equity, except ____________. notes payable...

Accounting questions : All of the following are components of stockholders’ equity, except ____________. notes payable Paid in capital retained earnings Treasury stock Earnings not distributed as dividends to stockholders is known as common stock Paid-in capital Retained earnings treasury stock When comparing the typical sole proprietorship and corporation, the form of business having higher assets and earnings is the corporation. true False A corporation’s officers are appointed by the: board of directors company president Primary stockholder state in which...

The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $3...

The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $3 par value, 300,000 shares authorized, 60,000 shares 180,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 240,000 From treasury stock 15,000 255,000 Retained earnings 174,000 609,000 Less: Treasury stock (6,000 shares) at cost 69,000 Total Stockholdersâ€™ Equity 540,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of previously unissued common stock...

Ribosomes can normally be found in all of the following eukaryotic cell locations except: A. the...

Ribosomes can normally be found in all of the following eukaryotic cell locations except: A. the outer nuclear membrane B. the rough endoplasmic reticulum C. the mitochondrion D. the inner nuclear membrane E. the chloroplast

Reporting Stockholders' Equity Using the following accounts and balances, prepare the Stockholders' Equity section of the...

Reporting Stockholders' Equity Using the following accounts and balances, prepare the Stockholders' Equity section of the balance sheet using Method 1 of Exhibit 8. 100,000 shares of common stock authorized, and 10,000 shares have been reacquired. Common Stock, $50 par $3,500,000 Paid-In Capital from Sale of Treasury Stock 70,000 Paid-In Capital in Excess of Par—Common Stock 630,000 Retained Earnings 1,855,000 Treasury Stock 32,000 Stockholders' Equity Paid-In Capital: Common Stock, $50 Par $ $ Total Paid-in Capital $ Total $ Total...

Jungle Corporation's stockholder's equity section at December 31, 2014 appears below: Stockholders equity Paid in Capital...

Jungle Corporation's stockholder's equity section at December 31, 2014 appears below: Stockholders equity Paid in Capital Common stock, $10 par, 60,000 outstanding $600,000 Paid in Capital in excess of par 150,000 Total paid in capital $750,000 Retained Earnings 150,000 Total Stockholder's Equity $900,000 On June 30, 2015, the board of directors of Kenner Corp declared a 15% stock dividend, payable on July 31, 2015, to stockholders of record on July 15, 2015. The fair value of Kenner Corp's stock on...

Shown below is the stockholders' equity section of Flamingo Corporation's balance sheet at December 31, 2020:...

Shown below is the stockholders' equity section of Flamingo Corporation's balance sheet at December 31, 2020: Flamingo Corporation Statement of Stockholder's Equity December 31, 2020 Common stock, $3 par value, 200,000 shares authorized, ____ shares issued and _____ outstanding $360,000 Additional paid in capital – common stock $400,000 Additional paid in capital – stock options $42,000 Total Paid in Capital $760,000 Retained Earnings $1,600,000 Less: Treasury Stock (10,000 shares) ($295,000) Total Stockholder’s Equity $2,065,000 Consider the following events in preparing...

Subjects