User Account

All Pages

Act360 module 2nbspnbspnbspnbspnbspnbspnbspnbspnbsp

Assignment Help Accounting Basics
Reference no: EM13375341

ACT360 Module 2          Critical Thinking

Financial Investments (50 Points)

Complete the following two questions. Submit journal entries in an Excel file and written segments in an MS Word document. For written answers, please make sure your responses are well-written, formatted per CSU-Global guidelines for APA Style, and have proper citation(s), if needed.

As auditor for Banquo & Associates, you have been assigned to check Duncan Corporation's computation of earnings per share for the current year. The controller, Mac Beth, has supplied you with the following computations.

Net income

$3,374,960

Common shares issued and outstanding:

 

Beginning of year

1,285,000

End of year

1,200,000

Average

1,242,500

Earnings per share:

 

 

 

$3,374,960

= $2.72 per share

1,242,500

You have developed the following additional information.

1.    There are no other equity securities in addition to the common shares.

2.    There are no options or warrants outstanding to purchase common shares.

3.    There are no convertible debt securities.

4.    Activity in common shares during the year was as follows.

Outstanding, Jan. 1

1,285,000

Treasury shares acquired, Oct. 1

1,035,000

Shares reissued, Dec. 1

1,165,000

Outstanding, Dec. 31

1,200,000

Questions:

1.    On the basis of the information above, do you agree with the controller's computation of earnings per share for the year? If you disagree, prepare a revised computation of earnings per share

2.    Assume the same facts as those presented above, except that options had been issued to purchase 140,000 shares of common stock at $10 per share. These options were outstanding at the beginning of the year, and none had been exercised or canceled during the year. The average market price of the common shares during the year was $25, and the ending market price was $35.  What earnings per share amounts will be reported?

 

 

 

Reference no: EM13375341

Questions Cloud

Choose an industry of your choice it must be from either : choose an industry of your choice. it must be from either canada or the united states of america. international
During the winter of 1973-74 a general system of wage and : during the winter of 1973-74 a general system of wage and price controls including a price ceiling on gasoline was in
What are the concept of debits and credits answer the : what are the concept of debits and credits. answer the following questions and submit the solutionsbullwhat is the
Question read the following article and answer the : question read the following article and answer the questions at the end.predictions of post-gfc gloom were premature by
Act360 module 2nbspnbspnbspnbspnbspnbspnbspnbspnbsp : act360 module 2nbspnbspnbspnbspnbspnbspnbspnbspnbsp critical thinkingfinancial investments 50 pointscomplete the
In the aftermath of a hurricane an entrepreneur took a : in the aftermath of a hurricane an entrepreneur took a one-month leave of absence without pay from her 4000 per month
1 truefalseuncertain read the statements carefully decide : 1. truefalseuncertain. read the statements carefully. decide whether the statement is true false or uncertain. explain
Financial crises such as the recent lsquosub-prime credit : financial crises such as the recent lsquosub-prime credit crisis have significant disruptive effects on the flow of
Nancy buys a house in 2000 he obtains a fixed 10 mortgage : nancy buys a house in 2000. he obtains a fixed 10 mortgage interest rate and makes payments of 1000 per month. the 2000

Reviews

Write a Review

Accounting Basics Questions & Answers

  Overhead applied to standard using activity-based costing

Donkey Company manufactures two products, Standard and DeLuxe. Donkey's overhead costs consist of machining, $2,000,000; and assembling, $1,000,000. Information on the two products is:

  Income statement of ohio corp

Ohio Corp. reported a deferred tax liability of $6,000,000 for the year ended December 31, 2012, when the tax rate was 40%. Income tax expense reported by Ohio on its year end December 31, 2013 income statement is:

  Taxable gain recognizing from the sale

Three years after the contribution date, the land contributed by Cheryl is sold by the partnership to a third party for $90,000. How much taxable gain will Cheryl recognize from the sale?

  Calculate inventory on each of the bases

Calculate the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept inunits only. carry unit costs to the nearest cent.

  Statement regarding capitalization criteria

Which of the following is a correct statement of one of the capitalization criteria?

  Implied annual interest rate-inherent in credit terms

Farewell company purchased merchandise with an invoice price of $2000 and credit terms of 2/10, n/30. Assuming a 360 day year, what is the implied annual interest rate inherent in the credit terms?

  Tax consequences of a property settlement

What issues should Marcia and Dave consider when formulating their divorce agreement? Solution: Marcia and Dave should consider the taxability of the transfer of the home to Marcia and the boat to Dave. That is, what are the tax consequences of a ..

  Estimated total future cash flows

At the beginning of 2011, based on new marketing research, Barkley determines that the fair value of the tradename is $12,000. Estimated total future cash flows from the trade name are $13,000 on January 4, 2011.

  Disclose the information in financial statements

You are auditing Diverse Carbon, a manufacturer of nerve gas for the military-The company’s legal counsel indicates that the company is liable, but the company does not want to disclose this information in the financial statements.

  Treasury stock transactions-complete journal entries

Treasury Stock Transaction-Nature corporation engaged in the folloiwing treasury transactions during current year. Complete three journal entries to record these treasury stock transactions.

  What is the business purpose doctrine

The U.S. Tax Code has evolved over time to include many credits and deductions. Certainly, the legislative process encourages offering tax benefits for certain behavior, such as buying a new car or home, investing in manufacturing equipment, and s..

  What are several possible explanations for the markdown

What are several possible explanations for the markdown and slow sale of common waleth Edison's bonds?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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