For the year ended December 31, 2016, Joey Co. reported NetIncome of $800,000. At January 1, 2016 the company had 900,000shares of common stock outstanding. Joey Co. also had $1,000,000 of6% cumulative preferred stock. No preferred dividends were paid in2016 and the preferred stock is non-convertible. The followingchanges in the number of shares occurred during 2016:
April1: Sold60,000 shares of common stock.
May 31: Declared and Distributed a 10% Stock Dividend
July1: Issued 72,000 shares of common stock
Required:
1.
Compute Joey Coâs earnings per share for the year ended December31, 2016.
2.
Given the facts as presented above, Joey Co would have to reportDiluted EPS at 12/31/2016.
TRUE or FALSE [Circle One]
3)
Explain your answer in part 2 above (brief short answer)
For the year ended December 31, 2016, Joey Co. reported NetIncome of $800,000. At January 1, 2016 the company had 900,000shares of common stock outstanding. Joey Co. also had $1,000,000 of6% cumulative preferred stock. No preferred dividends were paid in2016 and the preferred stock is non-convertible. The followingchanges in the number of shares occurred during 2016:
April1: Sold60,000 shares of common stock.
May 31: Declared and Distributed a 10% Stock Dividend
July1: Issued 72,000 shares of common stock
Required:
1. | Compute Joey Coâs earnings per share for the year ended December31, 2016. |
2. | Given the facts as presented above, Joey Co would have to reportDiluted EPS at 12/31/2016. TRUE or FALSE [Circle One] |
3) | Explain your answer in part 2 above (brief short answer) |
Related questions
At the beginning of 2015, Tyler Corporation had the followingstockholdersâ equity balances in its general ledger:
Common Stock, $10 Par Value | $2,500,000 |
Paid-In Capital in Excess of Par | 1,500,000 |
Paid-In Capital, Treasury Stock | 450,000 |
Paid-In Capital, Stock Options | 200,000 |
Retained Earnings | 5,000,000 |
Treasury Stock (15,000 shares) | (300,000) |
Total StockholdersâEquity | $9,350,000 |
The paid-in capital from stock options relates to optionsgranted on 1/1/07 to the CEO as incentive compensation. As of1/1/15, the remaining expected benefit period is four years;expense has been and will be recorded evenly over the benefitperiod.
The following events were among the many occurring in 2015:
January 2: Purchased 5,000 shares of its common stock for $16per share. Taylor uses the cost method of accounting for treasurystock transactions.
February 1: Declared and distributed a 1% stock dividend oncommon stock outstanding when the market price of the stock was $24per share.
April 1: Issued 20,000 shares of $50 par, noncumulative,convertible 6% preferred stock for $60 per share, where one shareof preferred stock is convertible into three shares of commonstock.
July 1: 2,000 shares of treasury stock that had been purchasedin a prior year for $21 per share were re-issued for $22 pershare.
August 1: Holders of 8,000 shares of the preferred stockconverted their shares into common stock when the market value ofthe common stock was $22 per share. Taylor uses the book valuemethod of accounting for conversions.
October 1: Declared and paid a cash dividend of $2 per share onthe outstanding common stock.
November 1: Corrected an error that was made several years ago,when land that had been purchased for $100,000 was inadvertentlyexpensed.
December 1: Declared and distributed a property dividend of landto preferred shareholders. The land had a fair value of $75,000 anda carrying value of $60,000.
December 31: Recorded 2015 compensation expense related to thestock options.
The 2015 Final Net Income, including the effects of any netincome items listed above (and the 2015 tax effects on net incomeitems), was $1,000,000. There were 500,000 shares authorized forboth preferred and common stock.
Required:
All journal entries for the items (a through i) above. Noexplanations. Ignore tax effects.
The 12/31/15 Stockholdersâ Equity section.
