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!!!

Questions #1

The following information is available for the first three years of operations for Faberge Corporation:

1.         Year                Accounting Income

       2020                          $ 250,000

       2021                             280,000

2. Included in the accounting income above is $10,000 annual dividends income from investments in taxpaying Canadian companies.
3. On January 2, 2020, equipment was purchased for $ 500,000. The equipment had an estimated service life of 5 years and no residual value. Straight-line depreciation is used for book purposes and CCA at 30% is used for tax purposes (ignore the half year rule for the first year).
4. On January 2, 2020, $ 210,000 was collected in advance for the rental of a building for three years. The entire $ 210,000 was included in taxable income in 2020, but two-thirds of the $ 210,000 was reported as unearned revenue at December 31, 2020 for book purposes.
5. The enacted tax rate is 40% for 2020, 35% for 2021 and 30% for 2023 and thereafter.

Instructions

1. Prepare a schedule comparing depreciation for book purposes with CCA for tax purposes.
2. Determined the taxable income and income tax payable for 2020.
3. Prepare a schedule of deferred taxable/deductible amounts and the deferred tax asset and/or liability at the end of 2020.
4. Calculate the net deferred tax expense or benefit for 2020.
5. Prepare the adjusting journal entries to record income tax expense, deferred taxes, and income tax payable for 2020.
6. Determined the taxable income and income tax payable for 2021.
7. Prepare a schedule of future taxable/deductible amounts and the deferred tax asset and/or liability at the end of 2021.
8. Calculate the net deferred tax expense or benefit for 2021.
9. Prepare the adjusting journal entries to record income tax expense, deferred taxes, and income tax payable for 2021.
10. Prepare the income tax section of the comparative income statements of 2020 and 2021

Problem 23-01

The following are Marigold Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020.

Additional information:

Prepare a statement of cash flows for Marigold Corp. for the year ended December 31, 2020, using the indirect method.

Problem 23-01

The following are Shamrock Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020.

Additional information:

Prepare a statement of cash flows for Shamrock Corp. for the year ended December 31, 2020, using the indirect method

The following transactions relate to the General Fund of the City of Buffalo Falls for the year ended December 31, 2017:

Beginning balances were: Cash, $90,000; Taxes Receivable, $185,000; Accounts Payable, $50,000; and Fund Balance, $225,000.

The budget was passed. Estimated revenues amounted to $1,200,000 and appropriations totaled $1,198,000. All expenditures are classified as General Government.

Property taxes were levied in the amount of $900,000. All of the taxes are expected to be collected before February 2018.

Cash receipts totaled $870,000 for property taxes and $290,000 from other revenue.

Contracts were issued for contracted services in the amount of $90,000.

Contracted services were performed relating to $81,000 of the contracts with invoices amounting to $80,000.

Other expenditures amounted to $950,000.

Accounts payable were paid in the amount of $1,070,000.

The books were closed.

Prepare journal entries for the above transactions. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund. Prepare a Balance Sheet for the General Fund assuming there are no restricted or assigned net resources and outstanding encumbrances are committed by contractual obligation.

l. what is the difference between a real independent voltage source and an ideal independent voltage source? Give an example of a real voltage source and explain how it differs from the ideal.

2. What does it mean when we say that a circuit containing multiple sources is invalid?Give an example of such a circuit and explain why it is invalid.

3. What is resistance? What is a node? What is a closed loop?

4. Write the equations for Ohm's law and for Kirchoff s two laws.

5. Explain how one can distinguish between two circuit elements which are connected inseries verses two circuit elements which are connected in parallel.

6.  If the two headlights of a car each dissipate 55W and each of them are connected to the two terminals of a 12V bafiery, draw an electric circtrit diagram which can model this headlight circuit and find the resistance of each headlight when it is turned on. Find the total current coming from the battery. If the battery is rated at 65 A-hr, how long will the headlights continue to burn before the battery is dead? Show all calculations.

The following selected accounts and account balances were taken from the records of Nowell Company. Except as otherwise indicated, all balances are as of December 31, Year 2, before the closing entries were recorded.

Required

a. Prepare the income statement Nowell would include in its Year 2 annual report.

b. Identify the accounts that should be closed to the Retained Earnings account.

c-1. Determine the Retained Earnings account balance at December 31, Year 2.

c-2. Which of the following statement(s) is true?

The following transactions relate to the General Fund of the City of Buffalo Falls for the year ended December 31, 2017:

1. Beginning balances were: Cash, $91,000; Taxes Receivable, $186,500; Accounts Payable, $50,750; and Fund Balance, $226,750.
2. The budget was passed. Estimated revenues amounted to $1,210,000 and appropriations totaled $1,207,800. All expenditures are classified as General Government.
3. Property taxes were levied in the amount of $905,000. All of the taxes are expected to be collected before February 2018.
4. Cash receipts totaled $875,000 for property taxes and $292,500 from other revenue.
5. Contracts were issued for contracted services in the amount of $91,750.
6. Contracted services were performed relating to $82,500 of the contracts with invoices amounting to $81,300.
7. Other expenditures amounted to $954,500.
8. Accounts payable were paid in the amount of $1,077,500.
9. The books were closed.

Required:
a. Prepare journal entries for the above transactions.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund.
c. Prepare a Balance Sheet for the General Fund assuming there are no restricted or assigned net resources and outstanding encumbrances are committed by contractual obligation.

The following transactions relate to the General Fund of the City of Buffalo Falls for the year ended December 31, 2017:

1. Beginning balances were: Cash, $95,000; Taxes Receivable, $192,500; Accounts Payable, $53,750; and Fund Balance, $233,750.
2. The budget was passed. Estimated revenues amounted to $1,250,000 and appropriations totaled $1,247,000. All expenditures are classified as General Government.
3. Property taxes were levied in the amount of $925,000. All of the taxes are expected to be collected before February 2018.
4. Cash receipts totaled $895,000 for property taxes and $302,500 from other revenue.
5. Contracts were issued for contracted services in the amount of $98,750.
6. Contracted services were performed relating to $88,500 of the contracts with invoices amounting to $86,500.
7. Other expenditures amounted to $972,500.
8. Accounts payable were paid in the amount of $1,107,500.
9. The books were closed.

Required:
a. Prepare journal entries for the above transactions.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund.
c. Prepare a Balance Sheet for the General Fund assuming there are no restricted or assigned net resources and outstanding encumbrances are committed by contractual obligation.

Mastery Problem: Corporations: Organization, Stock Transactions, and Dividends

Pranks, Inc.

Pranks, Inc. is a manufacturer of joke and novelty products for perpetrators of practical jokes. The corporation has paid several cash dividends throughout Year 6, the current year. It is also declaring a stock dividend to its stockholders as the calendar year-end approaches. You’ve been brought in as a consultant to assist with this process, and also to help determine whether some missing information can be determined before the distribution of the stock dividend is made. The company has two classes of stock: common stock and cumulative preferred stock.

Number of common shares authorized900,000

Number of common shares issued750,000

Par value of common shares$20

Par value of cumulative preferred shares$30

Paid-in capital in excess of par-common stock$7,000,000

Paid-in capital in excess of par-preferred stock$0

Total retained earnings before the stock dividend is declared$33,500,000

No treasury share have been reissued.

Preferred DividendsCommon Dividends

YearTotal Cash
DividendsTotalPer ShareTotalPer Share

Year 130,000  30,0000.20      00.00      

Year 254,000  54,0000.36      00.00      

Year 396,000  51,0000.34      45,0000.09      

Year 4120,000  45,0000.3      75,0000.15      

Year 5135,000  45,0000.3      90,0000.18      

Year 6195,000  45,0000.3      150,0000.3      

Cash Dividends

The accounting manager for the company prepared the schedule of cash dividends paid from Year 1 to Year 6 on the Pranks, Inc. panel. However, one of the reasons for Pranks, Inc.’s missing information is that the manager is away on vacation and is unreachable by phone, because he is backpacking on a remote island that does not have cell phone reception. Management would like you to determine some information from the data you’ve collected regarding its outstanding stock.

Fill in the following answers.

How many shares of common stock are outstanding?

How many shares of preferred stock are outstanding?

What is the preferred dividend as a percent of par?
%

Feedback

Review the definitions of the items, and the amounts that are included in their computation.

Additional Questions

1. After completing the Cash Dividends panel, answer the following question.

Does Pranks, Inc. have any treasury stock? How can you tell?

Yes, because the number of shares issued is greater than the number of shares outstanding.

2. In which years has Pranks, Inc. paid cumulative preferred dividends in arrears?

a.Year 1

b.Year 2

c.Year 3

d.Year 4

e.Year 5

f.Year 6

b and c

Feedback

1. Review the definitions and relationships between authorized, issued, and outstanding shares of stock.

2. Review the definition of cumulative preferred dividends in arrears. When did Pranks, Inc. not pay the full amount of preferred dividends due? When did they make up these amounts?

Stock Dividend

The company declared a 2% common stock dividend on December 1, and would like you to compute the following pieces of missing information. The market value of the common shares is $26 on December 1, and is $32 on the actual distribution date of the stock, December 31.

Fill in the missing information in the following table, using the information given and your work on the other panels. All “before” items are before the stock dividend was declared. All “after” items are after the stock dividend was declared and closing entries were recorded at the end of the year.

Total paid-in capital before the stock dividend$

Total retained earnings before the stock dividend

Total stockholders’ equity before the stock dividend$

Total paid-in capital after the stock dividend$

Total retained earnings after the stock dividend

Total stockholders’ equity after the stock dividend$