The following information is from 2019 statement of stockholders' equity for Katy Inc.
|
Stockholders' equity (in millions, except shares) |
2016 |
2015 |
||
|
Series A 5.375% mandatory convertible preferred stock |
$ 400 |
$ 400 |
||
|
Common stock, par value $0.01 (128,626,740 shares issued 2019; 128,228,477 shares issued 2018) |
1 |
1 |
||
|
Additional paid-in capital |
3,547 |
3,187 |
||
|
Accumulated other comprehensive income, net of tax |
21 |
19 |
||
|
Accumulated deficit |
(1,927 |
) |
(686 |
) |
|
Total Dynegy stockholders' equity |
2,042 |
2,921 |
||
|
Noncontrolling interest |
(3 |
) |
(2 |
) |
|
Total equity |
$2,039 |
$2,919 |
Dynegy has 420 million shares of common stock authorized. Assume
the following transactions occurred during the 2019.
|
Mar 10 |
Declare and pay a cash dividend of $2.00 per share |
|
May 6 |
Split stock 2-for-1 reducing the par value of the stock to $0.005 |
|
Aug 25 |
Issue a large stock dividend of 80% of the outstanding shares of common stock |
Required:
|
a. |
Use the financial statement effects template below to record the three transactions. |
|
b. |
How did the cash dividend affect the company's profitability for the year? |
|
c. |
What effects does the stock split have on Dynegy's financial statements? |
|
d. |
What effects does the stock split have on an individual stockholder? |
|
Balance Sheet |
Income Statement |
|
Transaction |
Cash Asset |
+ |
Noncash Assets |
= |
Liabil- ities |
+ |
Contrib. Capital |
+ |
Earned Capital |
Revenues |
– |
Expenses |
= |
Net Income |
|||
|
Mar 10 |
= |
– |
= |
||||||||||||||
|
May 6 |
= |
– |
= |
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|
Aug 25 |
= |
– |
= |
In: Accounting
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(Please justify your answer) A rare mutation generates a fourth blood group, C, where they are missing one additional carbohydrate from the glycoprotein, i.e. type I with one more sugar missing. What ABO blood groups could donate to this individual?
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Molly’s Greenhouse supplies bedding plants and other gardening products to a variety of stores across Alberta and also has a local greenhouse open to the public. Molly’s uses a perpetual inventory system and the earnings approach for revenue recognition. Transactions for the business are shown below:
| May | 2 | Purchased 500 decorative hanging baskets from Planters R Us, on account, at a cost of $26 each, terms 5/10, n/30. FOB shipping point. | |
| 3 | The correct company paid cash for the $175 shipping charges. | ||
| 4 | Sold 200 hanging baskets to a hardware store in the city, on account, for a total invoice price of $8,000. Terms are 1/10, n/30 and the cost was $26 per basket. Molly’s paid the shipping charge of $75 on the same day. | ||
| 5 | Received a credit from Planters R Us for the return of 60 hanging baskets that had defective hangers. | ||
| 7 | 20 of the baskets from the sale of May 4 were returned to the greenhouse for a full refund because the customer did not have enough room to store them. | ||
| 12 | Made a payment on account for the balance owing to Planters R Us for the purchase of May 2. | ||
| 13 | Received a cheque for the appropriate amount from the hardware store for the sale of May 4. |
Prepare journal entries to record the above transactions using the perpetual method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
(To record sales on account.) |
|||
|
(To record cost of goods sold.) |
|||
|
(To record cash payment for freight.) |
|||
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(To record credit for sales return.) |
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|
(To record cost of goods returned.) |
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|
May 13 |
|||
Prepare journal entries to record the above transactions using the periodic method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
| (To record sales on account.) | |||
| (To record cash payment for freight.) | |||
|
May 13 |
|||
In: Accounting
Ms. Kim is a general partner who holds a 50% interest in Mustang Partnership. This year, Mustang earned ordinary business income of $200,000 before accounting for any payments to partners. Mustang also received $8,000 in qualified dividend income and $3,000 of municipal bond interest income. During the year, Mustang paid Ms. Kim a $60,000 guaranteed payment for services to the partnership plus an additional cash distribution of $30,000 (assume Mustang made no payments to any other partner). Ms. Kim’s ordinary income tax rate is 25% and long-term capital gain and dividend tax rate is 15%. At the beginning of the year, Ms. Kim’s basis in her Mustang Partnership interest was $270,000.
a. Determine the tax cost of Ms. Kim’s share of Mustang partnership’s income for the year (ignore self-employment tax and the QBI deduction). (15 points)
b. Determine Ms. Kim’s after-tax cash flows from her investment in Mustang partnership for the year. (10 points)
c. Determine Ms. Kim’s basis in her Mustang Partnership interest at the end of the year. (5 points)
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Jeremy earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $11,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $23,000 in itemized deductions. (Use the tax rate schedules.)
a. Determine Jeremy’s tax refund or taxes due.
b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $4,000. What is Jeremy’s tax refund or tax due including the tax on the capital gain?
c. Assume the original facts except that Jeremy has only $7,000 in itemized deductions. What is Jeremy’s tax refund or tax due?
D. Determine Jeremy’s tax refund or taxes due (assume Jeremy did not receive the recovery rebate in advance of filing his tax return).
e. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $4,000. What is Jeremy’s tax refund or tax due including the tax on the capital gain?
In: Accounting
12. Farmer Inc. began business on January 1, 2021. Its pretax financial income for the first 2 years was as follows: 2021 $240,000 2022 560,000 The following items caused the only differences between pretax financial income and taxable income.
1. In 2021, the company collected $420,000 of rent; of this amount, $140,000 was earned in 2021; the other $280,000 will be earned equally over the 2022–2023 period. The full $420,000 was included in taxable income in 2021.
2. The company pays $10,000 a year for life insurance on officers.
3. In 2022, the company terminated a top executive and agreed to $90,000 of severance pay. The amount will be paid $30,000 per year for 2022–2024. The 2022 payment was made. The $90,000 was expensed in 2022. For tax purposes, the severance pay is deductible as it is paid. The enacted tax rates existing at December 31, 2021 are: 2021 20% 2023 30% 2022 25% 2024 30% Instructions
(a) Determine taxable income for 2021 and 2022.
(b) Determine the deferred income taxes at the end of 2021, and prepare the journal entry to record income taxes for 2021.
(c) Prepare a schedule of future taxable and (deductible) amounts at the end of 2022.
(d) Prepare a schedule of the deferred tax (asset) and liability at the end of 2022.
(e) Compute the net deferred tax expense (benefit) for 2022. (f) Prepare the journal entry to record income taxes for 2022. (g) Show how the deferred income taxes should be reported on the balance sheet at December 31, 2022.
In: Accounting
|
Determine the deferred income taxes at the end of 2021. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Prepare the journal entry to record income taxes for 2021. |
Prepare a schedule of future taxable and (deductible) amounts at the end of 2022.
Prepare a schedule of the deferred tax (asset) and liability at the end of 2022.
Compute the net deferred tax expense (benefit) for 2022.
Prepare the journal entry to record income taxes for 2022.
In: Accounting