Acc124Exam1Fall2004SOLN

Acc124Exam1Fall2004SOLN - NAME_ EXAM #1 Fall 2004 Exam...

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NAME_________________________ EXAM #1 Fall 2004 Exam Content and Point Allocation Question Type Point Value Multiple Choice (on PageOut) 25 Problem 1 – Earning Per Share 25 Problem 2 – Investments 20 Problem 3 – Dilutive Securities 15 Problem 4 – Shareholders’ Equity Transactions 15 TOTAL 100 ΕΞΑΜ#1/Φαλλ2004/Παγε 1
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NAME_________________________ PROBLEM 1: Earnings Per Share (25 points) Edward Cheney, controller at VP Industries, a public company, is currently preparing the calculation for basic and diluted earning per share and the related disclosure for VP’s external financial statements. Below is selected financial information for the fiscal year ended June 30, 2005. VP Industries Selected Statement of Financial Position Information June 30, 2005 Long-term Debt 7% convertible bonds payable $5,000,000 10% bonds payable 6,000,000 Total long-term debt $11,000,000 Shareholders’ Equity Preferred stock, 8½% cumulative, convertible, $50 par value, 100,000 shares authorized, 25,000 shares issued and outstanding $1,250,000 Common stock, $1 par, 10,000,000 shares authorized, 1,000,000 shares issued and 900,000 shares outstanding 1,000,000 Additional paid-in capital 4,000,000 Retained earnings 6,000,000 Treasury stock ($625,000 ) Total shareholders’ equity $11,625,000 The following transactions also occurred at VP: 16912. Options were granted in 2003 to purchase 100,000 shares of common stock at $15 per share. Although no options were exercised during 2005, the average price per common share during fiscal year 2005 was $20 per share.
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This homework help was uploaded on 04/10/2008 for the course ACT 123 taught by Professor Venuti during the Fall '07 term at Hofstra University.

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Acc124Exam1Fall2004SOLN - NAME_ EXAM #1 Fall 2004 Exam...

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