ACC 312 CH 16
(60QUESTIONS AND
ANSWERS)
Milton Company had 300,000 shares of common
stock issued and outstanding at December 31,
2020. During 2021, no additional common stock
was issued. On January 1, 2021, Milton issued
400,000 shares of nonconvertible preferred stock.
During 2021, Milton declared and paid $150,000
cash dividends on the common stock and $125,000
on the nonconvertible preferred stock. Net income
for the year ended December 31, 2021, was
$800,000. The 2021 earnings per common share,
rounded to the nearest penny will be - answer
$2.25
In which situation(s) are dilutive convertible
securities used? - answer In the computation of
diluted earnings per share only.
How should the difference between the cash
acquisition price of retired convertible debt and
the carrying amount of the debt be recorded by the
issuer? - answer It should be recorded as income.
, Which of the following statements is accurate with
regard to compensation expense resulting from a
compensatory stock option plan? - answer This
expense is generally allocated over the periods
benefited by the employee's required service.
On April 1, 2020, RL Enterprises issued $150,000 of
8% nonconvertible bonds at 104. Bonds are due on
March 31, 2040. Each $1,000 bond was issued with
25 detachable stock warrants entitling the
bondholder to purchase one share of common
stock (par value $25) for $50. On the date of issue,
the fair value of the stock was $40 per share and
the fair value of the warrants was $2. If RL's bonds
sell at 95 without the warrant, how much should RL
record as paid-in capital from the warrants? -
answer $7,800
At December 31, 2020, the Riley Company had
500,000 shares of common stock issued and
outstanding, 400,000 of which had been issued and
outstanding throughout the year and 100,000 of
which were issued on October 1, 2020. The net
income for the year ended December 31, 2020, was
$1,360,000. The 2020 earnings per common share,
rounded to the nearest penny would be - answer
$3.20
(60QUESTIONS AND
ANSWERS)
Milton Company had 300,000 shares of common
stock issued and outstanding at December 31,
2020. During 2021, no additional common stock
was issued. On January 1, 2021, Milton issued
400,000 shares of nonconvertible preferred stock.
During 2021, Milton declared and paid $150,000
cash dividends on the common stock and $125,000
on the nonconvertible preferred stock. Net income
for the year ended December 31, 2021, was
$800,000. The 2021 earnings per common share,
rounded to the nearest penny will be - answer
$2.25
In which situation(s) are dilutive convertible
securities used? - answer In the computation of
diluted earnings per share only.
How should the difference between the cash
acquisition price of retired convertible debt and
the carrying amount of the debt be recorded by the
issuer? - answer It should be recorded as income.
, Which of the following statements is accurate with
regard to compensation expense resulting from a
compensatory stock option plan? - answer This
expense is generally allocated over the periods
benefited by the employee's required service.
On April 1, 2020, RL Enterprises issued $150,000 of
8% nonconvertible bonds at 104. Bonds are due on
March 31, 2040. Each $1,000 bond was issued with
25 detachable stock warrants entitling the
bondholder to purchase one share of common
stock (par value $25) for $50. On the date of issue,
the fair value of the stock was $40 per share and
the fair value of the warrants was $2. If RL's bonds
sell at 95 without the warrant, how much should RL
record as paid-in capital from the warrants? -
answer $7,800
At December 31, 2020, the Riley Company had
500,000 shares of common stock issued and
outstanding, 400,000 of which had been issued and
outstanding throughout the year and 100,000 of
which were issued on October 1, 2020. The net
income for the year ended December 31, 2020, was
$1,360,000. The 2020 earnings per common share,
rounded to the nearest penny would be - answer
$3.20
