Compute the earnings per share of common stock using

Assignment Help Accounting Basics
Reference no: EM131134581

The ledger of Yakima Corporation at December 31, 2010, after the books have been closed, contains the following stockholders' equity accounts.

Preferred Stock (10,000 shares issued) ........ $1,000,000

Common Stock (400,000 shares issued) ........ 2,000,000

Paid-in Capital in Excess of Par Value-Preferred ...... 200,000

Paid-in Capital in Excess of Stated Value-Common .... 1,180,000

Common Stock Dividends Distributable .......... 200,000

Retained Earnings .................. 2,560,000

A review of the accounting records reveals the following.

1. No errors have been made in recording 2010 transactions or in preparing the closing entry for net income.

2. Preferred stock is 6%, $100 par value, noncumulative, and callable at $125. Since January 1,
2009, 10,000 shares have been outstanding; 20,000 shares are authorized.

3. Common stock is no-par with a stated value of $5 per share; 600,000 shares are authorized.

4. The January 1 balance in Retained Earnings was $2,450,000.

5. On October 1, 100,000 shares of common stock were sold for cash at $8 per share.

6. A cash dividend of $500,000 was declared and properly allocated to preferred and common stock on November 1. No dividends were paid to preferred stockholders in 2009.

7. On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $9.

8. Net income for the year was $970,000.

9. On December 31, 2010, the directors authorized disclosure of a $100,000 restriction of retained earnings for plant expansion. (Use Note A.)

Instructions

(a) Reproduce the Retained Earnings account (T-account) for 2010.

(b) Prepare a retained earnings statement for 2010.

(c) Prepare a stockholders' equity section at December 31, 2010.

(d) Compute the allocation of the cash dividend to preferred and common stock.

(e) Compute the earnings per share of common stock using 325,000 as the weighted average shares outstanding for the year.

Reference no: EM131134581

Questions Cloud

Leading pharmaceutical firm : On ethics: Dr. Margaret Chan, director general of the WHO, criticized the pharmaceutical industry for being "profit driven" and for failing to invest in the development of a vaccine or cure for Ebola. As CEO of a leading pharmaceutical firm, how do y..
Discuss negative and positive means of coping with stress : There are different triggers and means of coping with stress. Name at least 3 triggers of stress. Discuss both negative and positive means of coping with stress. What role do substances play in stress relief? How can substance users in recovery le..
Easy accessibility for their existing products : Suppose the Chester company begins to compete through good designs, high awareness and easy accessibility for their existing products, what strategy would they be implementing?
Workforce complement will grow : The Digby's workforce complement will grow by 20% (rounded to the nearest person) next year. Ignoring downsizing from automating, what would their total recruiting cost be? Assume Digby spends the same amount extra above the $1,000 recruiting base as..
Compute the earnings per share of common stock using : Compute the earnings per share of common stock using 325,000 as the weighted average shares outstanding for the year.
Explain in your own words what happiness is : Explain in your own words what happiness is. According to studies and/or the textbook, explain how thinking is believed to influence one's level of happiness as well as the development of depression and maintaining of its symptoms?
What is the minimum codon size in this genetic code : The space probe HEA1 returns to eat following a trip to the planet Tantoun. What is the minimum codon size in this genetic code
There were no dividends in arrears on preferred stock : There were no dividends in arrears on preferred stock. During 2010, the company had the following transactions and events.
Draw the marginal-benefit and marginal-cost curves : Draw the marginal-benefit and marginal-cost curves and show the optimum level of pollution abatement. (Related to Application 1 on page 663.)

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Accounting profits in making capital-budgeting decisions

Why do we focus on cash flows rather than accounting profits in making our capital-budgeting decisions? Why are we only interested in incremental cash flows rather than total cash flows? As a financial manager, explain why these concepts are impor..

  Project manager played in the execution of project

What role do you believe the project manager played in the execution of this project, including what they did well and areas they could have improved in?

  Return on equity compares net income

Return on equity compares net income to average stockholders' equity.

  Non-controlling interest in the net income

Compute Bell's income from Demers for the year ended December 31, 2011. Compute the non-controlling interest in the net income of Demers at December 31, 2011.

  Calculate below the amounts for each of these four taxes of

on january 8 the end of the first weekly pay period of the year regis companys payroll register showed that its

  Payroll sheet for otis import company

Suppose that instead the market quantity demanded at a price of $2.50 is only 75,000. How many firms do you expect there to be in this industry?  payroll sheet for Otis Import Company for the month of September

  The concept relating to the selection ofnbsp information

match terms and definitions. put your answer in the space

  Marino estimates that sales will be 8000 units what sales

marino estimates that sales will be 8000 units. what sales price per unit will allow the company to break even.expected

  Determine at least one issue that can result when you

determine at least one issue that can result when you dispose of depreciable business property. assess the key

  Issuing bonds is another way of raising funds for capital

you are a consultant for energy company. it is a utility company. it is thinking about expanding its energy production

  Determining the true cash balance

Determining the true cash balance as of August 31.  (Hint:  It is not necessary to use all of the preceding items to determine the true balance.)

  What is the cost to groom one dog

What is Fido's net operating income for April and what is the cost to groom one dog?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd