FM9e_SM13 - CHAPTER 13Solutions The Corporate Income...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Ch13 SE1 to SE2 CHAPTER 13—Solutions The Corporate Income Statement and the Statement of Stockholders' Equity Chapter 13, SE 1. 1. a; LIFO is more conservative. 2. c 3. b; ten-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 13, SE 2. Jefferson Company Income Statement For the Year Ended June 30, 2010 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 operations of discontinued segment (net of taxes, $35,000) ($100,000) Loss on disposal of segment (net of taxes, $8,000) ( 25,000) ( 125,000) Net loss ($ 55,000)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Ch13 SE3 to SE4 Chapter 13, 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 13, SE 4. Weighted-average number of common shares computed: 2010 720,000 x 7 / 12 year = 420,000 ( 720,000 + 480,000 ) × 5 / 12 year = 500,000 Total shares 920,000 2011 1,200,000 x 12 / 12 year = 1,200,000 Earnings per share computed: 2010 2011 Net income $1,338,400 $1,740,000 Weighted-average common shares 920,000 1,200,000 Earnings per share of common stock $1.45 $1.45 *Rounded. * +
Background image of page 2
Ch13 SE5 to SE6 Chapter 13, 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 13, 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 * +
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Ch13 SE7 Chapter 13, 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 x $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 x 224,400 shares = $112,200 (2% x 220,000 shares) on $10 par value
Background image of page 4
Ch13 SE8 to SE9 Chapter 13, 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 be prepared. Chapter 13, SE 9.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 46

FM9e_SM13 - CHAPTER 13Solutions The Corporate Income...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online