Professional Documents
Culture Documents
Multiple Choice
Midterm 40%
Cumulative 45%
Participation 15%
Treasury Stock
EPS- Net Income
Shares of Stock = $1,000,000/10,000
= 100
Buy Back own stock = repurchase of company stock. Value at cost
net at par value.
(Dr.)
(Cr.)
Treasury Stock
Cash
xxxx
xxxx
1000 share stock with a par value of -----------$5 per share was required at a cost of $10 par share
1000 shares of stock
Common Stock
Preferred Stock
Additional Paid in Capital
Retained Earnings
-
Stockholder Equity
Treasury Stock
Total Stockholder equity
2. Cash
XXX
Treasury Stock
XXX
Additional Paid in capital- TS XXX
425,000
425,000
(b)
Cash
(6000x 33)
Treasury Stock
(6000x 25)
Additional PIC-TS
198,000
150,000
48,000
Additional PIC-TS
----------------------------------------12,000
48,000
Dec 22
(c)
Cash
88,000
Additional PIC-TS
12,000
Treasury Stock
100,000
(4000x 25)
Exercise 11-13
Par Value
Additional PIC
1.
Cash
6,600,000
(550,000sh x $12)
Common Stock
5,500,000
(5,500,000 x $10 par value)
Additional PIC-CS
1,100,000
Sale of Common Stock
2.
Cash
4,400,000
(40,000 x 10)
Preferred Stock
4,000,000
Additional PIC-Preferred Stock
400,000
Sale of Preferred Stock
3.
Treasury Stock
Cash
575,000
575,000
__________________________________________
______________
Total Paid in Capital
11,000,000
Less: Treasury Stock
575,000
( not asset its a debit
________________________________________________________________
Total Stockholder Equity
10,425,000
account contra asset)
Ex 11-14
1.
Cash
1,800,000
(100,000 x 18)
Common Stock
10,000,000
Add PIC-CS
800,000
Sale of Common Stock
2.
Treasury Stock
500,000
Cash
500,000
Purchase 25,000 shares $20/sh
3.
Cash
230,000
(10,000 x 23)
TS
Additional PIC-TS
200,000
30,000
Stockholder Equity
_________________________________________
Common stock, $10 par value, 300,000 shares
Authorized, 100,000 issued
10,000,000
(100,000 x 10)
Additional PIC
_________________
Additional PIC- Common Stock
800,000
Additional PIC-TS
30,000
________________________________________________
Total PIC
1,830,000
Retained Earnings
120,000
________________________________________________
Total PIC & Retained Earnings
1,950,000
Less: Treasury Stock ***
300,000
(500,000 200,000)
________________________________________________________________
Total Stockholder equity
1,650,000
* Treasury Stock
_________________________________
500,000
200,000
300,000
***
25000 shares 10,000 shares
= 15000 share x 20
= 300,000
Problem 11-2B
1.
Cash
Preferred Stock
100,000
100,000
Cash
6,000,000
Common Stock
Add PIC-CS
400,000
5,600,000
Stockholder Equity
10% cumulative preferred stock, $100 par value
authorized issued & outstanding 10,000 shares
1,000,000
Common Stock, $1 par value, authorized
1,000,000 shares issued & outstanding
400,000
400,000
Additional paid in capital- Common Stock
5,600,000
Total paid in capital
7,750,000
Retained Earnings
750,000
Total Stockholder Equity
7,750,000
Net income - Increase R/E
Net loss
- Decrease R/E
Dividends - Decrease R/E
Computation of Retained Earnings
_____________________________________________________________________
Net income for 5 years
$ 4,100,000
Less: dividends
Preferred stock
(shares)(par value)(interest rate)
5( (10,000) (100) (.10))
Common Stock
5((400,000)(1)(.80))
Retained Earnings
Less: Net loss: 2015
Retained Earnings 12/31/15
500,000
1,600,000
2,000,000
4,250,000
750,000
Class- 2
6/02/2015
Chapter-12
Malox DC, Inc
Income Statement
For the year ended 12/31/15
Net Sales
Cost of Goods Sold
Gross Margin
9,000,000
4,000,000
----------------------------5,000,000
Operating Expenses:
Sell up expenses
General + Admin Expenses
1,500,000
920,000
1,750,000
(150,000)
(45,000)
(100,000)
(30,000)
------------------------
-( 175,000)
Net Income
1, 522,500
EPS- Earnings per share = net income preferred dividends
________________________________________
Weighted average Common Shares (not
responsible)
WTD average shares
.............................................................................................
156,250 shares
(If not preferred dividend, dont need to worry)
Extraordinary Items
**
(1)Material on Amount
(2)Unusual
(3)Not expected to recur in the future
Extraordinary Loss
Less: Tax Benefit
(30% of 75,000)
(75,000)
22,500
...................................................
= 11.2
175,000/ 156,250
1.12
....................................................
= 1.12
175,000/156,250
.34
9.74
....................................................
= .34
...................................................
= 9.74
52,500/156,250
1,522,500/156,250
.................................
540,000
Net Income - Preferred Dividends
21.43
.............
operations)
2.97
.................................
...............
(-)
18.46
182,000
EPS =
EPS =
Net Income = 1,920,000
EPS = 1,920,000- 0
400,000
= 4.8
Retained Earnings
Dividends Payable
500,000
500,000
Dividend payable
Cash
500,000
500,000
Stock Dividends
Small stock dividends less than 20% ( < 20%)
Use market value to calculate deductions from retained
earnings.
On June 1 Aspen Co. has 1,000,000 shares of $1 par value stock with a
market value of $25/share, the company declared a 5% stock
dividends.
1,000,000
x
.05
50,000 will receive extra shares
x 25
(market value par value)
1,250,000
Date of Declaration:
Dr.
Cr.
Retained Earnings
Stock dividends to be distributed
1,250,000