POA11e14 - Ch14 SE1 to SE2 THE CORPORATE INCOME STATEMENT...

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Unformatted text preview: Ch14 SE1 to SE2 THE CORPORATE INCOME STATEMENT AND THE STATEMENT OF STOCKHOLDERS' EQUITY Chapter 14, SE 1. 1. a; LIFO is more conservative. 2. c 3. b; 10-year useful life is more conservative. 4. a; accelerated method is more conservative. 5. c 6. a; immediate write-off is more conservative. 7. b; increase in percentage is more conservative. Chapter 14, SE 2. Jefferson Corporation Income Statement For the Year Ended June 30, 2011 Net sales $360,000 Cost of goods sold 175,000 Gross margin $185,000 Operating expenses 65,000 Income from continuing operations before income taxes $120,000 Income taxes expense 50,000 Income from continuing operations $ 70,000 Discontinued operations Loss from discontinued operations (net of taxes, $35,000) ($100,000) Loss on disposal of discontinued operations (net of taxes, $8,000) ( 25,000) (125,000) Net loss ($55,000) CHAPTER 14 Solutions Ch14 SE3 to SE4 Chapter 14, SE 3. 1. Taxable income of $800,000 $113,900 + [( $800,000 $335,000 ) 34% ] = $272,000 2. Taxable income of $40,000,000 $6,416,667 + [( $40,000,000 $18,333,333 ) 35% ] = $14,000,000 Chapter 14, SE 4. Weighted-average number of common shares outstanding computed: 2010 720,000 7 / 12 year = 420,000 ( 720,000 + 480,000 ) 5 / 12 year = 500,000 Total weighted-average shares 920,000 2011 1,200,000 12 / 12 year = 1,200,000 Earnings per share computed: 2010 2011 Net income $1,338,400 $1,740,000 Weighted-average common shares outstanding 920,000 1,200,000 Earnings per share of common stock $1.45 $1.45 *Rounded. * + Ch14 SE5 to SE6 Chapter 14, SE 5. 1. $50 per share ( $500,000 10,000 shares ) 2. $33.33 per share ( $200,000 6,000 shares ) 3. $50 per share ( $380,000 7,600 shares ) 4. $48 per share ( $48,000 1,000 shares ) *Rounded. Chapter 14, SE 6. Total Total Total Assets Liabilities Stockholders' Equity 1. No effect No effect No effect 2. No effect Increase Decrease 3. No effect No effect No effect 4. Decrease No effect Decrease * + Ch14 SE7 Chapter 14, SE 7. Feb. 15 Stock Dividends 66,000 Common Stock Distributable 44,000 Additional Paid-in Capital 22,000 Declaration of a stock dividend of 4,400 shares common stock, to be distributed on March 15, at the market value of stock of $66,000 ( 4,400 shares $15 per share) Mar. 1 No entry required. 15 Common Stock Distributable 44,000 Common Stock 44,000 Distribution of a stock dividend of 4,400 shares declared on February 15 30 Dividends 112,200 Dividends Payable 112,200 Declaration of a cash dividend $0.50 224,400 shares = $112,200 (2% 220,000 shares) on $10 par value Ch14 SE8 to SE9 Chapter 14, SE 8. After Stock Split Karton, Inc. Stockholders' Equity August 10, 2010 Contributed capital Common stock, $3 par value, 200,000 shares authorized, 187,500 shares issued and outstanding $ 562,500 Additional paid-in capital 1,500,000 Total contributed capital $2,062,500 Retained earnings 1,625,000 Total stockholders' equity $3,687,500 No entry is required, but a memorandum entry for informational purposes should...
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This note was uploaded on 11/02/2011 for the course ACCT 210 taught by Professor Mcgonigal during the Spring '11 term at E. Washington.

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POA11e14 - Ch14 SE1 to SE2 THE CORPORATE INCOME STATEMENT...

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