January 1- a 5 common stock dividend was issued the

Assignment Help Accounting Basics

Reference no: EM13481831

Charles Austin of the controller's office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 20013. Austin has compiled the information listed below.

1. The company is authorized to issue 8,000,000 shares of $10 par value common stock. As of December 31, 2012, 2,000,000 shares had been issued and were outstanding.

2. The per share market prices of the common stock on selected dates were as follows.

Price per Share
July 1, 2012 $20.00
January 1, 2013 $21.00
April 1, 2013 $25.00
July 1, 2013 $11.00
August 1, 2013 $10.50
November 1, 2013 $9.00
December 31, 2013 $10.00

3. A total of 700,000 shares of an authorized 1,200,000 shares of convertible preferred stock had been issued on July 1, 2012. The stock was issued at its par value of $25, and it has a cumulative dividend of $3 per share. The stock is convertible into common stock at the rate of one share of convertible preferred for one share of common. The rate of conversion is to be automatically adjusted for stock splits and stock dividends. Dividends are paid quarterly on September 30, December 31, March 31, and June 30.

4. East Aurora Corporation is subject to a 40% income tax rate.

5. The after-tax net income for the year ended December 31, 2013 was $11,550,000.

The following specific activities took place during 2013.

1. January 1- a 5% common stock dividend was issued. The dividend had been declared on December 1, 2012, to all stockholders of record on December 29, 2012.

2. April 1- a total of 400,000 shares of the $3 convertible preferred stock was converted into common stock. The company issued new common stock and retired the preferred stock. This was the only conversion of the preferred stock during 2013.

3. July 1- A 2-for-1 split of the common stock became effective on this date. The board of directors had authorized the split on June 1.

4. August 1-a total of 300,000 shares of common stock were issued to acquire a factory building.

5. November 1-a total of 24,000 shares of common stock were purchased on the open market at $9 per share. These shares were to be held as treasury stock and were still in the treasury as of December 31, 2013.

6. Common stock cash dividends-Cash dividends to common stockholders were declared and paid as follows.
April 15-$0.30 per share
October 15-$0.20 per share

7. Preferred stock cash dividends-Cash dividends to preferred stockholders were declared and paid as scheduled.

Instructions
(a) Determine the number of shares used to compute basic earnings per share for the year ended December 31, 2013.
(b) Determine the number of shares used to compute diluted earnings per share for the year ended December 31, 2013.
(c) Compute the adjusted net income to be used as the numerator in the basic earnings per share calculation for the year ended December 31, 2013.

Reference no: EM13481831

Questions Cloud

Paddle away sold 400 of those kayaks for 250 each - 100 : our company paddle away began operations on 1-1-12 and the year ended on 12-31-12. we buy kayaks and sell them in a

Will who is single and under age 50 is employed as a : will who is single and under age 50 is employed as a full-time tax accountant at a local manufacturing company where he

Compute the net cash inflow cash receipts less yearly cash : matheson electronics canadian branch will help introduce into canada the just developed new electronic device which

Interest of 854 has accrued on notes payable write : 1. the prepaid insurance account shows a debit of 6624 representing the cost of a 2-year fire insurance policy dated

January 1- a 5 common stock dividend was issued the : charles austin of the controllers office of thompson corporation was given the assignment of determining the basic and

Leach company invested 80000 in a certificate of deposit : leach company invested 80000 in a certificate of deposit onjune 1 2008. the certificate had a 6 annual interest rate

Activity rates from quattrone corporations activity-based : activity rates from quattrone corporations activity-based costing system are listed below. the company uses the

For each of the following cases indicate why management and : for each of the following cases indicate why management and the auditors determined that control

What are these source use or : what are these source use or exchange?1 performed services for cash2 performed services for clients on account3

User Account

All Pages