Reference no: EM133113823

Question 1 - Manchester Company issued 1,000 bond each with a par value of $1,000 and each carry a detachable warrant for the purchase of 3 shares of $40 each. On the date of the bond issue, the bonds could have been at 102, and the warrants could have been sold for $60 each separately. The bond was issued for $1,025,000 on January 5,2020.

Prepare a schedule allocating the bond issue receipts To the bond and the warrants.

Record the issue of the two securities using the proportional method.

Question 2 - Barre company had an income of $500,000 net of tax but before extraordinary items in 2020. They had an extraordinary lose of $100,000 net of tax. They had 10,000 shares of convertible preferred $100 par stock, 6% Dividend, with one year's dividend in arrears, convertible into 20,000 shares of common stock. Barre's weighted average shares for 2020 were 100,000 shares. The tax rate is 20%.

Prepare in good format earnings per share calculation for 2020 on all necessary part of income.

Question 3 - Montpelier Company has the following information at December 31, 2020.

Common Stock, 1,000,000 share authorized, 400,000 shares issued, $2 par Preferred stock, 200,00 shares authorized, 100,00 share issued, $10 par, 6% dividend Common Stock Dividend Distributatble, $250,000 Cash Dividend Payable, $200,000

Additional Paid in Capital Common $2,000,000

Additional Paid in Capital, Preferred, $1,000,000

Retained Earnings, $5,000,000

Treasury Stock, 40,000 shares, at cost $300,000

Prepare in proper format the stockholder equity section of Montpelier for Dec 31, 2020.