Great Northern Inc. reported the following comparative information in the Stockholders' Equity section of its 2009 balance

Question:

Great Northern Inc. reported the following comparative information in the Stockholders' Equity section of its 2009 balance sheet.


Great Northern Inc. reported the following comparative information in the Stockholders'


*Par value after June 1, 2009, stock split.
In addition, company records show that the following transactions involving stockholders' equity were recorded in 2008 and 2009.
2008
May 1 Sold 4,500 shares of common stock for $12, par value $10.
June 30 Sold 350 shares of preferred stock for $62, par value $50.
Aug. 1 Issued an 8% stock dividend on common stock. The market price of the stock was $15.
Sept. 1 Declared cash dividends of 12% on preferred stock and $1.50 on common stock.
Dec. 31 Income before extraordinary items for the year totaled $316,200. In addition, Great Northern had an extraordinary gain of $12,500, net of tax.
2009
Jan. 31 Sold 1,100 shares of common stock for $15.
May 1 Sold 300 shares of preferred stock for $64.
June 1 Issued a 2-for-1 split of common stock, reduced par value to $5.
Sept. 1 Purchased 500 shares of common stock for $9 to be held as treasury stock.
Oct. 1 Declared cash dividends of 12% on preferred stock and $2 per share on outstanding common stock.
Nov. 1 Sold 500 shares of treasury stock for $11.
Dec. 31 Net income for the year included an extraordinary loss, net of income tax, of $19,000.
Instructions:
Compute the basic EPS amounts for 2008 and 2009 to be presented in the income statement for2009.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Intermediate Accounting

ISBN: 978-0324312140

16th Edition

Authors: James D. Stice, Earl K. Stice, Fred Skousen

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