Complete a 2022 statement of owners’ equity. Examples are provided on pages 1053 and 1078 of your textbook. Customize your statement to fit the information in this assignment, using the headings provided. Note that the beginning additional paid-in capital accounts will contain all paid-in capital accounts (on common stock and related to stock options). Your statement will not include a number of shares, just dollar amounts.

Compute 2022 basic and diluted earnings per share. Assume an average market price of $80 per share for S&J’s common stock for the year and an ending market price of $90 a share. You are required to show your well-documented work.

PLEASE TURN IN YOUR ASSIGNMENT IN THE FOLLOWING ORDER:

Page 1: statement of owners’ equity.

Top of Page 2: basic and diluted earnings per share amounts.

The remainder of Page 2 and additional pages or pages if needed: well-labeled detailed computations of earnings per share.

Schuck and Jive Company (S&J) has the following information for 2022:

1. January 1, 2022, retained earnings balance was $800,000.

2. On January 1, 2022, S&J has 4,000 shares of $100 par value convertible preferred stock outstanding and 20,000 shares of $2 par value common stock outstanding. The preferred stock was originally issued at par value. The common stock was originally issued at $10 a share. Thus, as of January 1, 2022, in addition to the beginning balances in the common stock and preferred stock accounts, a $160,000 balance existed in the additional paid-in capital account.

The additional paid in capital account, stock options, had a balance of $10,000 on January 1, 2022. The total 1/1/2022 additional paid in capital accounts is $170,000 ($160,000 + $10,000).

3. The convertible preferred stock is convertible into 10,000 shares of common stock.

4. S&J declared and paid a $10,000 cash dividend in March of 2022 on its convertible preferred stock.

5. S&J’s 2022 net income is $810,000.

6. S&J hired the law firm of Dewey, Cheatem, and How to perform services during 2022. In payment for these legal services, S&J issued 1,200 shares of $2 par value common stock on May 1 of 2022. The fair value of the legal services is determined to be $96,000 and this amount is the fair value of the stock issued on the issue date.

7. On December 31 of 2022, S&J Employees exercised 1,000 stock options. Each option allows an employee to purchase 1 share of $2 par value common stock at the exercise price of $50 per share. These options were issued in 2017 at which time the fair value of each option was determined to be $10. [The service period/vesting period for these stock options was two years]. As noted above, the additional paid-in capital account, stock options, had a balance of $10,000 on January 1, 2022. The average market value of S&J stock was $80 in 2022. The ending market value of S&J stock was $90.

Answer rating: 100% (QA)

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