Administrador

16-1
1. Memo Entry (memo entry made to indicate the number of rights issued).
2. Cash 208,000
Discount on Bonds Payable 8,000
Bonds Payable 200,000
Paid-in Capital—Stock Warrants 16,0003. Cash 304,000
Common Stock 95,000
Paid-in Capital in Excess of Par—
Common Stock . 209,000

4. Cash 48,000
Paid-in Capital—Stock Warrants 12,800
Common Stock 16,000Paid-in Capital in Excess of Par—Common Stock 44,800

5. Compensation Expense 100,000
Paid-in Capital—Stock Options 100,000

6.Cash 270,000
Paid-in Capital—Stock Options 90,000
Common Stock90,000
Paid-in Capital in Excess of Par—
Common Stock 270,000

Paid-in Capital—Stock Option 10,000
Compensation Expense 10,000
(b) Stockholders’ Equity:

Paid-in Capital:
CommonStock, $10 par value, authorized
1,000,000 shares, 320,100 shares
issued and outstanding $3,201,000
Paid-in Capital in Excess of Par—
Common Stock 1,123,800
Paid-in Capital—Stock Warrants 3,200$4,328,000
Retained Earnings 750,000
Total Stockholders’ Equity $5,078,000
Calculations:
Paid-in Capital
Common Stock in Excess of Par
At beginning of year 300,000 shares$ 600,000
From stock rights 9,500 shares 209,000
From stock warrants 1,600 shares 44,800
From stock options 9,000 shares 270,000
Total 320,100 shares $1,123,800

16-5Basic earnings per share = Net income – Preferred dividends
Average common shares outstanding
$1,500,000 – $75,0001
1,000,000
= $1,425,000
1,000,000

= $1.425 or $1.43per share

1Preferred dividend = .06 X $1,250,000 = $75,000

Net income – Preferred dividends + Interest (net of tax)
Diluted earnings per share= Average common shares + Potentiallydilutive common shares

$1,500,000 – $75,000 + $240,0002
1,000,000 + 250,0003 + 50,0004

= $1,665,000 /1,300,000
= $1.2808 or $1.28 per share

2Use “if converted” method for 8% bonds...