Problem Facts Information related to the Sosa Company for the year 2020:
Common Stock- As of the end of 2020, Sosa had 240,000 shares of common stock outstanding. The shares are due to the following common stock transactions:
january 1, 2020 – 100,000 shares of common stock outstanding
April 1, 2020 – issued an additional 50,000 shares for cash
July 1, 2020 - issued a 2 for 1 stock split
September 1, 2020 – purchased 60,000 shares for treasury stock
Preferred Stock- As of the end of 2020, Sosa had 30,000 shares of 6%, $10 par value, cumulative, convertible preferred stock outstanding. The stock had been outstanding all year and the conversion ratio was each share of preferred stock is convertible into 3 shares of common stock.
Bonds Payable-As of the end of 2020, Sosa had $800,000, 7% bonds payable outstanding. The bonds had been outstanding for the entire year and each $1,000 bond was convertible into 10 shares of common stock.
Options-Sosa also had 10,000 common stock options outstanding all year. Each option allowed the holder to purchase 1 share of Sosa’s common stock for $45. During 2020, the average market price of Sosa’s common stock was $48 per share.
Additional Information Sosa’s 2020 net income was $580,000, and the company’s income tax rate was 34%.
REQUIRED
1. Compute the weighted average number of common shares Sosa will use to compute basic earnings per share.
2. Compute 2020 basic earnings per share
3. Identify which of the potentially dilutive securities (preferred stock, bonds, options) are dilutive (support must be shown to receive credit for this question)
4. Compute diluted earnings per share
please show work, thank you!!!
In: Accounting
Problem Facts Information related to the Sosa Company for the year 2020:
Common Stock- As of the end of 2020, Sosa had 240,000 shares of common stock outstanding. The shares are due to the following common stock transactions:
january 1, 2020 – 100,000 shares of common stock outstanding
April 1, 2020 – issued an additional 50,000 shares for cash
July 1, 2020 - issued a 2 for 1 stock split
September 1, 2020 – purchased 60,000 shares for treasury stock
Preferred Stock- As of the end of 2020, Sosa had 30,000 shares of 6%, $10 par value, cumulative, convertible preferred stock outstanding. The stock had been outstanding all year and the conversion ratio was each share of preferred stock is convertible into 3 shares of common stock.
Bonds Payable-As of the end of 2020, Sosa had $800,000, 7% bonds payable outstanding. The bonds had been outstanding for the entire year and each $1,000 bond was convertible into 10 shares of common stock.
Options-Sosa also had 10,000 common stock options outstanding all year. Each option allowed the holder to purchase 1 share of Sosa’s common stock for $45. During 2020, the average market price of Sosa’s common stock was $48 per share.
Additional Information Sosa’s 2020 net income was $580,000, and the company’s income tax rate was 34%.
REQUIRED
1. Compute the weighted average number of common shares Sosa will use to compute basic earnings per share.
2. Compute 2020 basic earnings per share
3. Identify which of the potentially dilutive securities (preferred stock, bonds, options) are dilutive (support must be shown to receive credit for this question)
4. Compute diluted earnings per share
please show work, thank you!!!
In: Accounting
Problem Facts Information related to the Sosa Company for the year 2020:
Common Stock- As of the end of 2020, Sosa had 240,000 shares of common stock outstanding. The shares are due to the following common stock transactions:
january 1, 2020 – 100,000 shares of common stock outstanding
April 1, 2020 – issued an additional 50,000 shares for cash
July 1, 2020 - issued a 2 for 1 stock split
September 1, 2020 – purchased 60,000 shares for treasury stock
Preferred Stock- As of the end of 2020, Sosa had 30,000 shares of 6%, $10 par value, cumulative, convertible preferred stock outstanding. The stock had been outstanding all year and the conversion ratio was each share of preferred stock is convertible into 3 shares of common stock.
Bonds Payable-As of the end of 2020, Sosa had $800,000, 7% bonds payable outstanding. The bonds had been outstanding for the entire year and each $1,000 bond was convertible into 10 shares of common stock.
Options-Sosa also had 10,000 common stock options outstanding all year. Each option allowed the holder to purchase 1 share of Sosa’s common stock for $45. During 2020, the average market price of Sosa’s common stock was $48 per share.
Additional Information Sosa’s 2020 net income was $580,000, and the company’s income tax rate was 34%.
REQUIRED
1. Compute the weighted average number of common shares Sosa will use to compute basic earnings per share.
2. Compute 2020 basic earnings per share
3. Identify which of the potentially dilutive securities (preferred stock, bonds, options) are dilutive (support must be shown to receive credit for this question)
4. Compute diluted earnings per share
please show work, thank you!!!
In: Accounting
Recording Common and Preferred Stock Transactions
Gilmore Company has 20,000 authorized shares of common stock, $2 par, and also 20,000 authorized shares of preferred stock, $10 par.
Required
Record journal entries for the following separate transactions. Analyze and record each transaction separately.
a. On January 1, 2020, Gilmore sold 720 shares of common stock and 360 shares of preferred stock for a lump sum of $22,140. The common stock had been selling during the current week at $25 per share, and the preferred at $12 per share. Round amounts to the nearest dollar.
b. On January 1, 2020, Gilmore issued 324 shares of preferred stock for used equipment. The equipment had been appraised at $4,320, and the book value recorded by the seller was $2,160. A reliable determinable fair value on the preferred stock has not been established.
c. Assume that the 36,000 shares of preferred stock are callable for $12 per share at the option of the issuer, Gilmore. After issuing 900 shares of callable preferred stock on January 1, 2020, for $12, Gilmore recalled 180 shares of preferred stock on June 30, 2020, for $12. Record the entries for Gilmore on January 1, 2020, and on June 30, 2020.
d. Assume that each of the 36,000 shares of preferred stock is convertible into 2 shares of common stock at the option of the stockholder. After issuing 900 shares of convertible preferred stock on January 1, 2020, for $12, 180 shares of preferred stock were converted into common stock on June 30, 2020. Record the entries for Gilmore on January 1, 2020, and on June 30, 2020, assuming that the fair value of the preferred stock was $16 per share on June 30, 2020.
In: Accounting
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In: Accounting
In: Accounting
In: Accounting
Chapter 11 Operational Assets: Utilization and Impairment
Jackson Company purchased a new piece of equipment on July 1, 2018 at a cost of $36,000. The equipment has an estimated useful life of 10 years and an estimated residual value of $6,000. During its ten-year useful life, the equipment is expected to produce 500,000 units. The equipment actually produced the following number of units: 2018, 25,000; 2019, 84,000; and 2020, 90,000.
(a) Calculate depreciation expense for 2018, 2019, and 2020 assuming Jackson uses sum-of-the-years’-digits depreciation.
(b) Calculate depreciation expense for 2018, 2019, and 2020 assuming Jackson uses double-declining balance depreciation.
In: Accounting
2018
2019
2020
Costs to
date
$1,500,000
$4,000,000
$6,200,000
Cost to
complete
$4,500,000
$2,200,000
$0
Amounts billed to date
$1,400,000
$5,800,000
$9,000,000
Amounts collected to date
$1,300,000
$4,300,000
$9,000,000
Determine the gross profit to be recognized for
2018 2019 2020
Record all journal entries necessary for 2018 below:
Assume that Stanford uses the completed contract method.
Determine the amount of revenue and expense to be recognized
in:
2018
2019
2020
In: Accounting
In: Accounting