Reference no: EM132938693

Questions -

Q1. The shareholders' equity of HS Corporation includes $300,000 of $1 par common stock and $600,000 par of 6% cumulative preferred stock. The board of directors of HS declared cash dividends of $70,000 in 2021 after paying $30,000 cash dividends in 2020 and $50,000 in 2019. What is the amount of dividends common shareholders will receive in 2021?

Q2. An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $45. If the semiannual market rate of interest is 6%, what is the current market value of the bond?

Q3. On March 25, 2021, Phillips Corporation purchased bonds of Atlas Corporation for $173 million and classified the securities as trading securities. On December 31, 2021, these bonds were valued at $191 million. Three months later, on April 3, 2022, Phillips Corporation sold these bonds for $180 million.

As part of the multistep approach to record the 2022 transaction, Phillips Corporation should first update the fair value adjustment by recording?

Q4. Coy, Inc. initially issued 270,000 shares of $1 par stock for $1,350,000 in 2019. In 2020, the company repurchased 27,000 shares for $270,000. In 2021, 13,500 of the repurchased shares were resold for $216,000. In its balance sheet dated December 31, 2021, Coy, Inc.'s treasury stock account shows a balance of?

Q5. Yellow Enterprises reported the following ($ in thousands) as of December 31, 2021. All accounts have normal balances.

Deficit (debit balance in retained earnings) $1,700

Common stock 3,300

Paid-in capital-share repurchase 1,300

Treasury stock (at cost) 380

Paid-in capital-excess of par 31,900

During 2022 ($ in thousands), net income was $9,800; 25% of the treasury stock was resold for $480; cash dividends declared were $640; cash dividends paid were $460. What ($ in thousands) was shareholders' equity as of December 31, 2021?

Q6. During 2021, Farewell Inc. had 502,000 shares of common stock and 51,000 shares of 4% cumulative preferred stock outstanding. The preferred stock has a par value of $100 per share. Farewell did not declare or pay any dividends during 2021.

Farewell's net income for the year ended December 31, 2021, was $2.7 million. The income tax rate is 15%. Farewell granted 12,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $31 per share. The options vest after one year. The market price of the common stock averaged $32 per share during 2021. What is Farewell's diluted earnings per share for 2021, rounded to the nearest cent?

Q7. During 2021, Angel Corporation had 900,000 shares of common stock and 50,000 shares of 5% preferred stock outstanding. The preferred stock does not have cumulative or convertible features. Angel declared and paid cash dividends of $310,000 and $155,000 to common and preferred shareholders, respectively, during 2021.

Q8. To encourage employee ownership of the company's common shares, KL Corp. permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 13% discount. During May, employees purchased 11,000 shares at a time when the market price of the shares on the New York Stock Exchange was $9 per share. KL will record compensation expense associated with the May purchases of?

Q9. Under its executive stock option plan, N Corporation granted options on January 1, 2021, that permit executives to purchase 11.0 million of the company's $1 par common shares within the next eight years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $15 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. No forfeitures are anticipated. Ignoring taxes, what is the effect on earnings in the year after the options are granted to executives?

Q10. Rudyard Corporation had 110,000 shares of common stock and 11,000 shares of 7%, $100 par convertible preferred stock outstanding during the year. Net income for the year was $420,000 and dividends were paid to both common and preferred shareholders. Rudyard's effective tax rate is 25%. Each share of preferred stock is convertible into four shares of common stock. What is Rudyard's diluted EPS (rounded)?

Q11. Blue Cab Company had 57,000 shares of common stock outstanding on January 1, 2021. On April 1, 2021, the company issued 27,000 shares of common stock. The company had outstanding fully vested incentive stock options for 8,500 shares exercisable at $11 that had not been exercised by its executives. The end-of-year market price of common stock was $20 while the average price for the year was $19. The company reported net income in the amount of $304,915 for 2021. What is the diluted earnings per share (rounded)?

Q12. An analyst compiled the following information for U Inc. for the year ended December 31, 2021:

-Net income was $1,740,000.

-Depreciation expense was $420,000.

-Interest paid was $210,000.

-Income taxes paid were $105,000.

-Common stock was sold for $204,000.

-Preferred stock (8% annual dividend) was sold at par value of $254,000.

-Common stock dividends of $54,000 were paid.

-Preferred stock dividends of $20,320 were paid.

-Equipment with a book value of $104,000 was sold for $208,000.

Using the indirect method, what was U Inc.'s net cash flow from operating activities for the year ended December 31, 2021?

On January 1, 2020, Angel issued $2,010,000 of convertible 6% bonds at face value. Each $1,000 bond is convertible into five common shares.

Angel's net income for the year ended December 31, 2021, was $6.00 million. The income tax rate is 25%.

What will Angel report as diluted earnings per share for 2021, rounded to the nearest cent?