1. A company had 400,000 common shares outstanding during 2020.It also had 100,000 shares of 8%, $100 par nonconvertible and...
1. A company had 400,000 common shares outstanding during 2020.It also had 100,000 shares of 8%, $100 par nonconvertible and cumulative preferred stock outstanding for the entire year of 2020.The company did not declare and pay a preferred dividend in 2019 and 2020. It earned net income of $16,000,000 during 2020. Compute basic earnings per share for 2020. Round to the nearest penny if necessary.
2. A company had 2,000 shares outstanding at the beginning of the year. On February 1, 470 shares of outstanding stock were purchased at $90 per share. On May 1, a $25 per share cash dividend was declared. The company’s retained earnings had a beginning balance of $271,000 and net income for the year as $95,000. What is the company’s ending balance for retained earnings?
3. A company issued $800,000 of 10%, ten-year convertible bonds on January 1, 2020 at 104, with interest payable July 1 and January1. Bond discount/premium is amortized semiannually on a straight-line basis. How much interest expense should the company record on June 30, 2020? (If there is no interest expense to be recorded, then enter 0.)
4. On June 1, 2021, a company issued $400,000 of 8% bonds at106, which mature ten years later. One detachable stock warrant entitling the holder to purchase one share of the company’s common stock, $22 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 93. On June 1, 2021, the fair value of the warrants was $320 per warrant. On June 1, 2021, the company should record Paid-in Capital from Stock Warrants for_________.
5. A company has $820,000 of 8% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $9 par value common stock. On July 31, 2020, the holders of $820,000 bonds exercised the conversion privilege. On that date the market price of the bonds was 105 and the market price of the common stock was$36. The total unamortized bond premium at the date of conversion was $160,000. The company should record, as a result of this conversion, an amount of __________ to Paid-in Capital in Excess of Par – c/s. (If the amount is zero, then enter 0.)
6.On January 1, 2020, a company had 100,000 shares of common stock outstanding. On April 1 it issued 3,000 shares, and on July 1it acquired 3,000 shares of treasury stock. Determine the weighted-average number of shares outstanding as of December 31,2020.
7. On January 1, 2020, a company issued $3,000,000 of 6%convertible preferred stock. Each $1,000 preferred share is convertible into 20 shares of the company’s common stock. The company's net income in 2020 was $5,000,000. The company had400,000 shares of common stock outstanding throughout 2020. None of the convertible preferred stock was converted in 2020. Compute diluted earnings per share for 2020. Round to nearest cent if necessary.
8. A company has common stock with $20 par value per share. During 2020, the following transactions occurred:
- 8,000 shares were reacquired at $25 per share.
- 8,000 shares were reacquired at $31 per share.
- 4,000 shares of treasury stock (the ones purchased at $25 per share) were sold at $37 per share.
The cost method is used to record treasury stock transactions. What is Treasury Stock ending balance at the year end?
9. On January 1, 2021, a company granted stock options to employees for the purchase of 17,000 shares. Each option allows the employees to purchase one share of the company's $1 par common stock at $28 per share. The options are exercisable during a six-year period beginning January 1, 2023 by grantees still employed by the company. The Black-Scholes option pricing model determines total compensation expense to be $195,000. The market price of common stock was $22 per share at the date of grant. The compensation expense related to these options for 2021 is____________. (Round to the nearest dollar if necessary. If there is no compensation expense for 2021, then enter 0.)
10. In 2020, a company issued for $70 per share, 46,000 shares of $62 par value convertible preferred stock. One share of preferred stock can be converted into four shares of the company’s$45 par value common stock at the option of the preferred stockholder. In August 2021, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What total amount should be recorded for Retained Earnings as a result of the conversion of the preferred stock into common stock? If no amount should be recorded for Retained Earnings, then enter 0.
11. A company issued $800,000 of 9%, ten-year convertible bonds on January 1, 2020 at 89, with interest payable July 1 and January 1. Bond discount/premium is amortized semiannually on a straight-line basis. On July 1, 2023, these bonds were converted into common stock. What should be the amount of the unamortized bond discount/premium on July 1, 2023 relating to the bonds converted?
12. On January 1, 2020, a company had 500,000 shares of common stock outstanding. On March 1, it issued a 3-for-1 stock split. On July 1 it Issued 20,000 shares. On September 1 it Issued a 20% stock dividend. Determine the weighted-average number of shares outstanding as of December 31, 2020.