a. On January 5th, J & J issued a property dividend. Investments (stock in the Duh Company) comprising of 1000 shares was issued. The stock has a fair market value of $25 per share. The stock cost J & J $20 per share. They issued the Duh stock one month later. Prepare the entry. b. On May 15th, J & J issued 5,000 shares of cumulative, 10% preferred stock, with a par value of $100 for $112 per share. Prepare the entry. c. A subsidiary of J and J had outstanding, at the end of the year, 10,000 shares of common stock outstanding and 5,000 shares of non-cumulative/non-participating preferred stock. J & J wants to issue cash dividends totaling $80,000. Calculate how much goes to preferred stock holders and common stock holders.

Assume that the above subsidiary reported net income of $105,000 and had 1200 convertible bonds payable outstanding. In addition, the subsidiary had 5,000 shares of cumulative 8%, $100 par value preferred stock. The bonds pay 2% interest annually and mature in 2020. Further assume that the bonds are convertible at the rate of 100 shares of $10 par value stock per bond. The stocks market value is $12 per share. Calculate diluted earnings per share. The marginal tax rate is 30%.