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Unformatted text preview: 650 CHAPTER 13 The Corporate Income Statement and the Statement of Stockholders' Equity CHAPTER ASSIGNMENTS Short Exercises 101 Quality of Earnings SE 1 Each of the items listed below is a quality of earnings issue. Indicate whether the item is (a) an accounting method, (b) an accounting estimate, or (c) a non- operating item. For any item for which the answer is (a) or (b), indicate which alternative is usually the more conservative choice. 1. LIFO versus FIFO 2. Extraordinary loss 3. 10-year useful life versus 15-year useful life 4. Straight-line versus accelerated method 5. Discontinued operations 6. Immediate write-off versus amortization 7. Increase versus decrease in percentage of uncollectible accounts L01 Corporate Income Statement SE 2. Assume that Jefferson Company's chief financial officer gave you the fol- lowing information: net sales, $360,000; cost of goods sold, $175,000; loss from discontinued operations (net of income tax benefit of $35,000), $100,000; loss on disposal of discontinued operations (net of income tax benefit of $8,000), $25,000; operating expenses, $65,000; income taxes expense on continuing oper- ations, $50,000. From this information, prepare the company's income statement for the year ended June 30, 2010. (Ignore earnings per share information.) L02 Corporate Income Tax Rate Schedule SE 3. Using the corporate tax rate schedule in Table 13-1, compute the income tax liability for taxable income of (1) $800,000 and (2) $40,000,000. LO3 Earnings per Share SE 4. During 2010, Wells Corporation reported a net income of $1,338,400. On January 1, Wells had 720,000 shares of common stock outstanding. The company issued an additional 480,000 shares of common stock on August 1. In 2010, the company had a simple capital structure. During 2011, there were no transactions involving common stock, and the company reported net income of $1,740,000. Determine the weighted-average number of common shares outstanding for 2010 and 2011. Also compute earnings per share for 2010 and 2011. LO4 Statement of Stockholders' Equity SE 5. Refer to the statement of stockholders' equity for Crisanti Corporation in Exhibit 13-5 to answer the following questions: (1) At what price per share were the 5,000 shares of common stock sold? (2) What was the conversion price per share of the common stock? (3) At what price was the common stock selling on the date of the stock dividend? (4) At what price per share was the treasury stock purchased? LO4 LOS Effects of Stockholders' Equity Actions SE 6. Tell whether the following actions will increase, decrease, or have no effect Stop & Review 649 L05 Account for stock A stock dividend is a proportional distribution of shares among a corporation's dividends and stock stockholders. The following is a summary of the key dates and accounting treat- splits....
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This note was uploaded on 02/18/2012 for the course ACCOUNTING 2301 taught by Professor Dr.susaneason during the Spring '12 term at San Jacinto.
- Spring '12
- Income Statement