During Year 3, Zachary Corporation reported after-tax net income of $3,590,000. During the year, the number of shares of stock outstanding remained constant at 9,720 of $100 par, 8 percent preferred stock and 399,000 shares of common stock. The company's total stockholders' equity is $19,600,000 at December 31, Year 3. Zachary Corporation's common stock was selling at $50 per share a the end of its fiscal year. All dividends for the year have been paid, including $5.00 per share to common stockholders. a. Compute the earnings per share. Note: Round your answer to 2 decimal places. b. Compute the book value per share of common stock. Note: Round your answer to 2 decimal places. c. Compute the price-earnings ratio. Note: Round intermediate calculations and final answer to 2 decimal places.

During Year 3, Zachary Corporation reported after-tax net income of $3,590,000. During the year, the number of shares of stock outstanding remained constant at 9,720 of $100 par, 8 percent preferred stock and 399,000 shares of common stock. The company's total stockholders' equity is $19,600,000 at December 31, Year 3. Zachary Corporation's common stock was selling at $50 per share a the end of its fiscal year. All dividends for the year have been paid, including $5.00 per share to common stockholders. a. Compute the earnings per share. Note: Round your answer to 2 decimal places. b. Compute the book value per share of common stock. Note: Round your answer to 2 decimal places. c. Compute the price-earnings ratio. Note: Round intermediate calculations and final answer to 2 decimal places.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 18E: Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares...

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On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
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