Reference no: EM133045846

Questions -

Q1. On December 31, 2020, Winterton, Inc. had 600,000 shares of ordinary stock issued and outstanding. Winterton issued a 10 percent stock dividend on July 1, 2021. On October 1, 2021, Winterton reacquired 48,000 shares of its ordinary stock and recorded the purchase using the cost method of accounting for treasury stock. What number of shares should be used in computing basic earnings per share for the year ended December 31, 2021?

a. 612,000

b.618,000

c.648,000

d.660,000

Q2. At December 31, 2020, Mavis Company had 150,000 shares of ordinary stock issued and outstanding. On April 1, 2021, an additional 30,000 shares of ordinary stock were issued. Mavis's net income for the year ended December 31, 2021, was 517,500. During 2021, Mavis declared and paid 300,000 in cash dividends on its nonconvertible preferred stock. The basic earnings per ordinary share, rounded to the nearest penny, for the year ended December 31, 2021, should be

a. 3.00

b. 2.00

c. 1.45

d. 1.26

Q3. The Eglinton Company's net income for the year ended December 31 was 30,000. During the year, Eglinton declared and paid 3,000 in cash dividends on preferred stock and 5,250 in cash dividends on ordinary stock. At December 31, 36,000 shares of ordinary stock were outstanding, 30,000 of which had been issued and outstanding throughout the year and 6,000 of which were issued on July 1. There were no other ordinary stock transactions during the year, and there is no potential dilution of earnings per share. What should be the year's basic earnings per ordinary share of Eglinton, rounded to the nearest penny?

a. 0.66

b. 0.75

c. 0.82

d. 0.91

Q4. Dundas, Inc. had 150,000 shares of ordinary stock issued and outstanding at December 31, 2020. On July 1, 2021, an additional 25,000 shares of ordinary stock were issued for cash. Dundas also had unexercised stock options to purchase 20,000 shares of ordinary stock at 15 per share outstanding at the beginning and end of 2021. The market price of Dundas ordinary stock was 20 throughout 2021. What number of shares should be used in computing diluted earnings per share for the year ended December 31, 2021?

a. 182,500

b. 180,000

c. 177,500

d. 167,500

Q5. Angel Company granted 25,000 share appreciation rights which entitled key employees to receive cash equal to the difference between P15 and the market price of each share on the date of each right is exercised. The service period is for three years, and the right are exercisable in fourth year. The market price of the share is P20 and P23 at the end of first and second year, respectively.

What amount should be recognized as liability under the share appreciation rights at the end of second year?

a. 190,000

b. 155,000

c. 133,000

d. 100,000

Q6. Kaila Company granted 202 share appreciation rights to each of the 1,200 employees in January 2020. The entity estimated that 90% of the awards will vest on December 31, 2020. The fair value of each right on December 31, 2020 is P22. Service period is 3 years.

What is the accrued liability on December 31, 2020?

a. 4,799,520

b. 4,000,000

c. 1,200,000

d. 1, 599,840