Shamel Company has the following portfolio of securities at April 30, 2020, its last reporting date. Trading Securities Cost/Book Fair Value Value Jahra Co. ordinary (2,000 shares) Hawali Co. ordinary (2,500 shares) Salmeya Corp. ordinary (3,000 shares) 1- On May. 20, 2020, the Jahra Co. shares were sold at a price of $150 per share. 2- In addition, 5,000 shares of Salem Co. common stock were acquired at $20 per share on Aug. 5, 2020. 3- The Dec. 31, 2020, fair values were Hawali $100,000, Salmeya Co. $180,000 and SalemCo. common $300,000. Instructions: $ 200,000 S 400,000 250,000 125,000 300,000 200,000 1- Evaluate the Portfolio at April 30, 2020 and prepare the necessary entries. 2- Prepare the necessary entries at May 20, 2020. 3- Prepare the necessary entries at August 5, 2020. 4- Evaluate the Portfolio on December 31, 2020 and prepare the necessary entries.

Shamel Company has the following portfolio of securities at April 30, 2020, its last reporting date. Trading Securities Cost/Book Fair Value Value Jahra Co. ordinary (2,000 shares) Hawali Co. ordinary (2,500 shares) Salmeya Corp. ordinary (3,000 shares) 1- On May. 20, 2020, the Jahra Co. shares were sold at a price of $150 per share. 2- In addition, 5,000 shares of Salem Co. common stock were acquired at $20 per share on Aug. 5, 2020. 3- The Dec. 31, 2020, fair values were Hawali $100,000, Salmeya Co. $180,000 and SalemCo. common $300,000. Instructions: $ 200,000 S 400,000 250,000 125,000 300,000 200,000 1- Evaluate the Portfolio at April 30, 2020 and prepare the necessary entries. 2- Prepare the necessary entries at May 20, 2020. 3- Prepare the necessary entries at August 5, 2020. 4- Evaluate the Portfolio on December 31, 2020 and prepare the necessary entries.

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 21P: Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate...

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Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.
Frost Company has accumulated the following information relevant to its 2019 earningsper share. 1. Net income for 2019: 150,500. 2. Bonds payable: On January 1, 2019, the company had issued 10%, 200,000 bonds at 110. The premium is being amortized in the amount of 1,000 per year. Each 1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted. 3. Bonds payable: On December 31, 2017, the company had issued 540,000 of 5.8% bonds at par. Each 1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds have been converted. 4. Preferred stock: On July 3, 2018, the company had issued 3,800 shares of 7.5%, 100 par, preferred stock at 108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid. 5. Common stock: At the beginning of 2019, 25,000 shares were outstanding. On August 3, 7,000 additional shares were issued. During September, a 20% stock dividend was declared and issued. On November 30, 2,000 shares were reacquired as treasury stock. 6. Compensatory share options: Options to acquire common stock at a price of 33 per share were outstanding during all of 2019. Currently, 4,000 shares may be acquired. To date, no options have been exercised. The unrecognized compens Frost Company has accumulated the following information relevant to its 2019 earnings ns is 5 per share. 7. Miscellaneous: Stock market prices on common stock averaged 41 per share during 2019, and the 2019 ending stock market price was 40 per share. The corporate income tax rate is 30%. Required: 1. Compute the basic earnings per share. Show supporting calculations. 2. Compute the diluted earnings per share. Show supporting calculations. 3. Indicate which earnings per share figure(s) Frost would report on its 2019 income statement.
On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.
During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
Calculating the Number of Shares Issued Castalia Inc. issued shares of its $0.80 par value common stock on September 4, 2019, for $8 per share. The Additional Paid-In Capital-Common Stock account was credited for 5612,000 in the journal entry to record this transaction. Required: How many shares were issued on September 4, 2019?
Accounting Swifty Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2020, the end of the company’s third quarter: Investment Cost Fair Value 53,000 common shares of Yuen Inc. $355,100 $212,000 4,300 preferred shares of Monty Ltd. 163,400 172,000 1,900 common shares of Oakwood Inc. 171,000 170,050 On October 8, 2020, the Yuen shares were sold for $6.70 per share. On November 16, 2020, 3,000 common shares of Patriot Corp. were purchased at $44.90 per share. Swifty pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2020, the fair values of the shares held were as follows: Monty $103,700; Patriot $119,500; and Oakwood $192,850. Swifty prepares financial statements every quarter. (a) Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2020.…
Flounder Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2023, the end of the company's third quarter: Investment Cost Fair Value 47,500 common shares of Yuen Inc. $266,000 $190,000 3,200 preferred shares of Monty Ltd. 121,600 128,000 1,350 common shares of Oakwood Inc. 121,500 120,825 On October 8, 2023, the Yuen shares were sold for $5.60 per share. On November 16, 2023, 3,000 common shares of Patriot Corp. were purchased at $43.80 per share. Flounder pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2023, the fair values of the shares held were as follows: Monty $102,050; Patriot $116,750; and Oakwood $137,025. Flounder prepares financial statements every quarter. (a) Your answer is partially correct. Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2023.…
Presented below is selected information related to the financial instruments of Pronghorn Company at December 31, 2020. This is Pronghorn Company’s first year of operations. CarryingAmount Fair Value(at December 31) Investment in debt securities (intent is to hold to maturity) $42,700 $43,600 Investment in Chen Company stock 848,500 952,100 Bonds payable 237,600 213,400 (a) Pronghorn elects to use the fair value option for these investments. Assuming that Pronghorn’s net income is $106,200 in 2020 before reporting any securities gains or losses, determine Pronghorn’s net income for 2020. Assume that the difference between the carrying value and fair value is due to credit deterioration. Pronghorn’s net income for 2020 $ (b) Record the journal entry, if any, necessary at December 31, 2020, to record the fair value option for the bonds payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.…
Pina Colada Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2023, the end of the company's third quarter: Investment Cost Fair Value 50,500 common shares of Yuen Inc. $313,100 $202,000 3,800 preferred shares of Monty Ltd. 1,650 common shares of Oakwood Inc. 144,400 152,000 148,500 147,675 On October 8, 2023, the Yuen shares were sold for $6.20 per share. On November 16, 2023, 3,000 common shares of Patriot Corp. were purchased at $44.40 per share. Pina Colada pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2023, the fair values of the shares held were as follows: Monty $102,950; Patriot $118,250; and Oakwood $167,475. Pina Colada prepares financial statements every quarter. (a) Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2023. (Credit account titles…
The following information is available for Stellar Company at December 31, 2020, regarding its investments. Securities Cost Fair Value 500 shares of Runner Corporation common stock $25,000 $39,000 7,200 shares of Sher-tor Corporation preferred stock 659,000 626,000 $684,000 $665,000 (a) Prepare the adjusting entry (if any) for 2020, assuming the securities are classified as trading. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (b) Prepare the adjusting entry (if any) for 2020, assuming the securities are classified as available-for-sale. (Credit account titles are automatically…
Alpha company reported the following equity accounts on January 1, 2020. Tpoint hare capital, P20 par, P8,000,000; Share premium, P2,750,000; Retained earnings. P1,275,000. All shares outstanding on January 1 were issued for P26 a share. On December 31. the entity reacquired 20,000 shares at P24 a share and retired them. What is the balance of the share premium?
Bernabe Company reported the following equity accounts in January 1, 2020:Share Capital, P20 par 8,000,000Share premium 2,550,000Retained earnings 1,275,000All shares outstanding on January 1, 2020 were issued in 2019 for P26 per share. On December 31, 2020, the entity reacquired 20,000 shares at P24 per share and retired them. Immediately after the shares were retired, what is the balance of share premium