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This paperwork of ACC 227 Week 7 Discussion Question 1 
comprises: Complete Exercise 11-24 on p. 407. 
When you respond to your classmates 
Business - Accounting 
E15-13 (a,b) (Stock Split and Stock Dividend) 
The common stock of Warner Inc. is currently selling at $110 
per share. The directors wish to reduce the share price and 
increase share volume prior to a new issue. The per share par 
value is $10; book value is $70 per share. Five million shares 
are issued and outstanding. 
(a) How much is the debit to retained earnings if the board 
votes a 2-for-1 stock split? 
(b) Prepare the necessary journal entries if the board votes a 
100% stock dividend. 
P15-1 (Equity Transactions and Statement Preparation) 
On January 5, 2010, Phelps Corporation received a charter 
granting the right to issue 5,000 shares of $100 par value, 8% 
cumulative and nonparticipating preferred stock, and 50,000 
shares of $10 par value common stock. It then completed 
these transactions. 
Jan. 11 Issued 20,000 shares of common stock at $16 per 
share. 
Feb. 1 Issued to Sanchez Corp. 4,000 shares of preferred 
stock for the following assets: machinery with a fair market 
value of $50,000; a factory building with a fair market value 
of $160,000; and land with an appraised value of $270,000. 
July 29 Purchased 1,800 shares of common stock at $17 per
share. (Use cost method.) 
Aug. 10 Sold the 1,800 treasury shares at $14 per share. 
Dec. 31 Declared a $0.25 per share cash dividend on the 
common stock and declared the preferred dividend. 
Dec. 31 Closed the Income Summary account. There was a 
$175,700 net income. 
Instructions 
(a) Record the journal entries for the transactions listed 
above. 
(b) Prepare the stockholders’ equity section of Phelps 
Corporation’s balance sheet as of December 31, 
2010. 
E16-20 (EPS: Simple Capital Structure) On January 1, 2010, 
Bailey Industries had stock outstanding as follows. 
6% Cumulative preferred stock, $100 par value, 
issued and outstanding 10,000 shares $1,000,000 
Common stock, $10 par value, issued and 
outstanding 200,000 shares 2,000,000 
To acquire the net assets of three smaller companies, Bailey 
authorized the issuance of an additional 
170,000 common shares. The acquisitions took place as 
shown below. 
Date of Acquisition Shares Issued 
Company A April 1, 2010 60,000 
Company B July 1, 2010 80,000 
Company C October 1, 2010 30,000 
On May 14, 2010, Bailey realized a $90,000 (before taxes) 
insurance gain on the expropriation of 
investments originally purchased in 2000. 
On December 31, 2010, Bailey recorded net income of 
$300,000 before tax and exclusive of the gain.
Instructions 
Assuming a 40% tax rate, compute the earnings per share 
data that should appear on the financial statements 
of Bailey Industries as of December 31, 2010. Assume that 
the expropriation is extraordinary. 
P16-7 (Computation of Basic and Diluted EPS) Charles Austin 
of the controller’s office of Thompson Corporation was given 
the assignment of determining the basic and diluted earnings 
per share values for the year ending December 31, 2011. 
Austin has compiled the information listed below. 
1. The company is authorized to issue 8,000,000 shares of 
$10 par value common stock. As of 
December 31, 2010, 2,000,000 shares had been issued and 
were outstanding. 
2. The per share market prices of the common stock on 
selected dates were as follows. 
Price per Share 
July 1, 2010 $20.00 
January 1, 2011 21.00 
April 1, 2011 25.00 
July 1, 2011 11.00 
August 1, 2011 10.50 
November 1, 2011 9.00 
December 31, 2011 10.00 
3. A total of 700,000 shares of an authorized 1,200,000 
shares of convertible preferred stock had been 
issued on July 1, 2010. The stock was issued at its par value of 
$25, and it has a cumulative dividend 
of $3 per share. The stock is convertible into common stock 
at the rate of one share of convertible 
preferred for one share of common. The rate of conversion is
to be automatically adjusted 
for stock splits and stock dividends. Dividends are paid 
quarterly on September 30, December 31, 
March 31, and June 30. 
and so on.. 
Instructions 
(a) Determine the number of shares used to compute basic 
earnings per share for the year ended 
December 31, 2011. 
(b) Determine the number of shares used to compute diluted 
earnings per share for the year ended 
December 31, 2011. 
(c) Compute the adjusted net income to be used as the 
numerator in the basic earnings per share 
calculation for the year ended December 31, 2011. 
The true value of a college education can depend on a 
surprisingly large number of factors. The key to getting the 
most out of the experience is to acquire as much knowledge 
about the process ahead of time and acting accordingly. 
Follow the concepts in this piece and you will be thoroughly 
prepared to succeed.... 
https://bitly.com/12B1XbJ

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Acc 227 week 7 dq 1

  • 1. Get complete A+ tutorial here https://bitly.com/12B1XbJ This paperwork of ACC 227 Week 7 Discussion Question 1 comprises: Complete Exercise 11-24 on p. 407. When you respond to your classmates Business - Accounting E15-13 (a,b) (Stock Split and Stock Dividend) The common stock of Warner Inc. is currently selling at $110 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Five million shares are issued and outstanding. (a) How much is the debit to retained earnings if the board votes a 2-for-1 stock split? (b) Prepare the necessary journal entries if the board votes a 100% stock dividend. P15-1 (Equity Transactions and Statement Preparation) On January 5, 2010, Phelps Corporation received a charter granting the right to issue 5,000 shares of $100 par value, 8% cumulative and nonparticipating preferred stock, and 50,000 shares of $10 par value common stock. It then completed these transactions. Jan. 11 Issued 20,000 shares of common stock at $16 per share. Feb. 1 Issued to Sanchez Corp. 4,000 shares of preferred stock for the following assets: machinery with a fair market value of $50,000; a factory building with a fair market value of $160,000; and land with an appraised value of $270,000. July 29 Purchased 1,800 shares of common stock at $17 per
  • 2. share. (Use cost method.) Aug. 10 Sold the 1,800 treasury shares at $14 per share. Dec. 31 Declared a $0.25 per share cash dividend on the common stock and declared the preferred dividend. Dec. 31 Closed the Income Summary account. There was a $175,700 net income. Instructions (a) Record the journal entries for the transactions listed above. (b) Prepare the stockholders’ equity section of Phelps Corporation’s balance sheet as of December 31, 2010. E16-20 (EPS: Simple Capital Structure) On January 1, 2010, Bailey Industries had stock outstanding as follows. 6% Cumulative preferred stock, $100 par value, issued and outstanding 10,000 shares $1,000,000 Common stock, $10 par value, issued and outstanding 200,000 shares 2,000,000 To acquire the net assets of three smaller companies, Bailey authorized the issuance of an additional 170,000 common shares. The acquisitions took place as shown below. Date of Acquisition Shares Issued Company A April 1, 2010 60,000 Company B July 1, 2010 80,000 Company C October 1, 2010 30,000 On May 14, 2010, Bailey realized a $90,000 (before taxes) insurance gain on the expropriation of investments originally purchased in 2000. On December 31, 2010, Bailey recorded net income of $300,000 before tax and exclusive of the gain.
  • 3. Instructions Assuming a 40% tax rate, compute the earnings per share data that should appear on the financial statements of Bailey Industries as of December 31, 2010. Assume that the expropriation is extraordinary. P16-7 (Computation of Basic and Diluted EPS) Charles Austin of the controller’s office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2011. Austin has compiled the information listed below. 1. The company is authorized to issue 8,000,000 shares of $10 par value common stock. As of December 31, 2010, 2,000,000 shares had been issued and were outstanding. 2. The per share market prices of the common stock on selected dates were as follows. Price per Share July 1, 2010 $20.00 January 1, 2011 21.00 April 1, 2011 25.00 July 1, 2011 11.00 August 1, 2011 10.50 November 1, 2011 9.00 December 31, 2011 10.00 3. A total of 700,000 shares of an authorized 1,200,000 shares of convertible preferred stock had been issued on July 1, 2010. The stock was issued at its par value of $25, and it has a cumulative dividend of $3 per share. The stock is convertible into common stock at the rate of one share of convertible preferred for one share of common. The rate of conversion is
  • 4. to be automatically adjusted for stock splits and stock dividends. Dividends are paid quarterly on September 30, December 31, March 31, and June 30. and so on.. Instructions (a) Determine the number of shares used to compute basic earnings per share for the year ended December 31, 2011. (b) Determine the number of shares used to compute diluted earnings per share for the year ended December 31, 2011. (c) Compute the adjusted net income to be used as the numerator in the basic earnings per share calculation for the year ended December 31, 2011. The true value of a college education can depend on a surprisingly large number of factors. The key to getting the most out of the experience is to acquire as much knowledge about the process ahead of time and acting accordingly. Follow the concepts in this piece and you will be thoroughly prepared to succeed.... https://bitly.com/12B1XbJ