User Account

All Pages

Prepare the journal entry required by the airline in

Assignment Help Accounting Basics
Reference no: EM13484648

On June 1, 2012, Andre Company and Agassi Company merged to form Lancaster Inc. A total of 907,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis.

On April 1, 2014, the company issued an additional 657,000 shares of stock for cash. All 1,564,000 shares were outstanding on December 31, 2014.

Lancaster Inc. also issued $857,000 of 20-year, 9% convertible bonds at par on July 1, 2014. Each $1,000 bond converts to 42 shares of common at any interest date. None of the bonds have been converted to date.

Lancaster Inc. is preparing its annual report for the fiscal year ending December 31, 2014. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,545,000. (The tax rate is 40%.)

Determine the following for 2014.

(a) The number of shares to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.)

1. Basic earnings per share

2. Diluted earnings per share

(b) The earnings figures to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.)

1. Basic earnings per share

2. Diluted earnings per share

Question 2: 10 points

On November 24, 2014, 26 passengers on Windsor Airlines Flight No. 901 were injured upon landing when the plane skidded off the runway. Personal injury suits for damages totaling $9,374,000 were filed on January 11, 2015, against the airline by 18 injured passengers. The airline carries no insurance. Legal counsel has studied each suit and advised Windsor that it can reasonably expect to pay 50% of the damages claimed. The financial statements for the year ended December 31, 2014, were issued February 27, 2015.

Prepare the journal entry required by the airline in preparation of the December 31, 2014, financial statements. (If no entry is required, respond with "no entry needed"

Question 3: 25 points

On April 1, 2014, Seminole Company sold 15,300 of its 11%, 14-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2015, Seminole took advantage of favorable prices of its stock to extinguish 6,100 of the bonds by issuing 201,300 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2015.

Prepare the journal entries needed on the books of Seminole Company to record the following. (Round answers to 0 decimal places, e.g. 38,548)

(a)

April 1, 2014: issuance of the bonds.

(b)

October 1, 2014: payment of semiannual interest.

(c)

December 31, 2014: accrual of interest expense.

(d)

March 1, 2015: extinguishment of 6,100 bonds. (No reversing entries made.)

Reference no: EM13484648

Questions Cloud

Calculate kidds exchange gain or loss if kidd receives : using the same data in problema calculate kidds exchange gain or loss if kidd receives payment from the british
Nbspon august 1 kidd trading received an order from a : nbspon august 1 kidd trading received an order from a british customer for pound1000000 to be paid on receipt of the
What is the largest dollar item in the operating activities : locate the 2009 financial statements for the walt disney company on the internet and consider the following1.does
Option to suspend natural resource extraction facilities : option to suspend natural resource extraction facilities such as oil wells or gold mines provides a good example of
Prepare the journal entry required by the airline in : on june 1 2012 andre company and agassi company merged to form lancaster inc. a total of 907000 shares were issued to
Bonjur inc imports french cheeses for distribution in the : bonjur inc. imports french cheeses for distribution in the us. on april 1 the company purchased cheese costing 400000
Market efficiency implications explain why a : market efficiency implications explain why a characteristic of an efficient market is that investments in that market
On june 1 johnson inc received an order from a japanese : on june 1 johnson inc. received an order from a japanese customer for 2500000 yen to be paid upon receipt of the goods
The ward county hospital center wchc wants to buy a new : the ward county hospital center wchc wants to buy a new mobile primary care van to use in screening residents in an

Reviews

Write a Review

Accounting Basics Questions & Answers

  Current earning an economic profit

Peter is currently raising corn on his 100-acre farm and earning an accounting profit of $100 per acre. However, if he raised soybeans, he could earn $200 per acre. Is he currently earning an economic profit? Why or not?

  Why is it important for financial statements and other

why is it important for financial statements and other external reports to be based on generally accepted accounting

  Relation to the decision to make or buy the component

If the company were to buy the component, the machine would no longer be rented. The rent on the machine, in relation to the decision to make or buy the component, is:

  Preparing the disclosure statements for these items

In the beginning of 2012, Ken Corp changed its salvage value of equipment from 3 to 5 years. The change is material in the financial statements.

  Trial balance and journalize the adjusting entry

If Allowance for Doubtful Accounts has a credit balance of $2,201 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 12% of accounts receivable.

  Increase in a current liability

A transaction that is likely to cause an increase in a current liability is: A. payment of accrued wages. B. accrual of interest expense.

  The division of profits and losses among the members of a

the division of profits and losses among the members of a partnership is formalized in thea. indemnity clause.b.

  Determine the cost of direct materials

A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used.

  Relative high audit fees

Explain how acceptance of large, high risk audit clients for relatively high audit fees may threaten and audit firm's de facto and perceived independence. Under what circumstances should such prospective clients be avoided?

  Expenses incurred and retained earnings relationships

Assume that retained earnings increased by $240,000 from December 31, 2005, to December 31, 2006, for Miller Corporation. During the year, a cash dividend of $140,000 was paid.

  Bonds upon issuance using ifrs

Banks Billiard Company (BBC) issued $5 million in par value of bonds for $5.1 million. BBC incurred $200,000 in accounting fees and $50,000 in banking fees related to this transaction. What amounts should BBC record for the bonds upon issuance usi..

  Gain on sale of debt investements

Tolan co. purchased 30,6% irick company bonds for 60,000 cash plus brokerage fees of $600. Interest is payable seminannualy on july 1 and january 1. if 15 of the securities are sold on july 1 from $31,000 less $300 brokerage fees, the entry would ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd