During 2009 the ellis corporation had 370000 shares of 20

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Reference no: EM13583947

1. Employees of Harding Fabricators, Inc. earned gross wages of $140,000 during a recent two-week period. Employee withholdings and payroll tax percentages are presented below:

Federal withholding - 33,000

Hospital insurance premiums - 3,050

FICA - 7.5%

state unemployment - 2.0%

Federal unemployment - .8%

Only $78,000 of wages are subject to FICA and $36,000 are subject to unemployment taxes

a) prepare the entry to record the gross payroll

b) prepare the entry to record employer payroll taxes

2. The following information relates to the defined benefit pension plan of the Ruder Co.

Projected benefit obligation, Jan. 1 2008 - 280,000

Projected benefit obligation, Dec. 31 2008 - 307,500

Accumulated benefit obligation, Jan 1 2008 - 240,000

Accumulated Benefit obligation, Dec 31 2008 - 256,000

Benefits paid to retirees during 2008 - 22,000

Contributions by employer during 2008 - 37,500

settlement rate - 10%

a) compute the amount of service cost for 2008

b) Prepare the reconciliation between the beginning and ending balances for the projected benefit obligation disclosure as required by GAAP

3. On Dec 31, 2007, Jamfest Travel Inc. had 450,000 shares of no-par common stock issued and outstanding. All shares were sold for $7.50. On June 30 2008, the firm issed an additional 135,000 shares for $7 per share. The 2008 income was $319,200. On Sept 1 2008 a 15 percent stock dividend was issued to all common shareholders. On Oct 1 2009, 60,000 shares were reacquired as treasury shares. Net income in 2009 was $278,063.

a) Compute the weighted everage number of common shares outstanding for 2008 and 2009 that should be shown on comparative statements at the end of 2009

b) compute the basic earnings per share in 2008 and 2009 to be reported on comparative statements at the end of 2009

4. During 2009, the Ellis Corporation had 370,000 shares of $20 par common stock outstanding. On Jan 1 2009, 2,000, 8 percent bonds were issued with a maturity value of $1,000 each. To enhance the bond sale, the company offered a conversion of 50 shares of common stock for each bond at the option of the purchaser. Net income for 2009 was $464,000. The income tax rate was 30 percent. Compute the diluted earnings per share of common stock

Reference no: EM13583947

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