Allen Lumber Company had earnings after taxes of $600,000 in the year 2021 with 200,000 shares outstanding. On October 1, 2022,the firm issued 40,000 new shares. The company took the proceeds from these new shares as well as other operatingimprovements and earnings after taxes improved by 20% in 2022.Calculate Earnings per share for the year 2022. [Show detailed calculation with the formula to get proper credit]

Earnings per share or EPS is an indicator of a company's profitability. The higher the EPS , the…

Answered: Allen Lumber Company had earnings after…

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 24E

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Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1, 000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50, 000 to retire bonds with a face value (and book value) of 50, 000. e. On July 2, 2019, Farrell purchased equipment for 63, 000 cash. f. On December 31, 2019, land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows. (Appendix 21.1) Spreadsheet and Statement Refer to the information for Farrell Corporation in P21-13. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support a 2019 statement of cash flows. (Hint: Combine the income statement and December 31, 2019, balance sheet items for the adjusted trial balance. Use a retained earnings balance of 291,000 in this adjusted trial balance.) 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)
Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and 2018, and the statement of income and retained earnings for the year ended December 31, 2019: Additional information: a. On January 2, 2019, Farrell sold equipment costing 45,000, with a book value of 24,000, for 19,000 cash. b. On April 2, 2019, Farrell issued 1,000 shares of common stock for 23,000 cash. c. On May 14, 2019, Farrell sold all of its treasury stock for 25,000 cash. d. On June 1, 2019, Farrell paid 50,000 to retire bonds with a face value (and book value) of 50,000. e. On July 2, 2019, Farrell purchased equipment for 63,000 cash. f. On December 31, 2019. land with a fair market value of 150,000 was purchased through the issuance of a long-term note in the amount of 150,000. The note bears interest at the rate of 15% and is due on December 31, 2021. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2019, based on the preceding information. 2. Prepare the statement of cash flows.
DIVIDENDS Brooks Sporting Inc. is prepared to report the following 2019 income statement (shown in thousands of dollars). Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 320,000 shares of common stock outstanding, and its stock trades at 37 per share. a. The company had a 25% dividend payout ratio in 2018. If Brooks wants to maintain this payout ratio in 2019, what will be its per-share dividend in 2019? b. If the company maintains this 25% payout ratio, what will be the current dividend yield on the companys stock? c. The company reported net income of 1.35 million in 2018. Assume that the number of shares outstanding has remained constant. What was the companys per-share dividend in 2018? d. As an alternative to maintaining the same dividend payout ratio. Brooks is considering maintaining the same per-share dividend in 2019 that it paid in 2018. If it chooses this policy, what will be the companys dividend payout ratio in 2019? e. Assume that the company is interested in dramatically expanding its operations and that this expansion will require significant amounts of capital. The company would like to avoid transactions costs involved in issuing new equity. Given this scenario, would it make more sense for the company to maintain a constant dividend payout ratio or to maintain the same per-share dividend? Explain.
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.
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.
Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares of 10%, 100 par, nonconvertible preferred stock outstanding, on which the years dividends had been paid. At the beginning of 2019, the company had 7,000 shares of common stock outstanding. On April 2, 2019, the company issued another 2,000 shares of common stock so that 9,000 common shares were outstanding at the end of 2019. Common dividends of 17,000 had been paid during 2019. At the end of 2019, the market price per share of common stock was 17.50. Required: 1. Compute Mononas basic earnings per share for 2019. 2. Compute the price/earnings ratio for 2019.
Bowles Inc. is prepared to report the following income statement (shown in thousands of dollars) for the year 2019: Sales $15,200 Operating costs including depreciation 11,900 EBIT $ 3,300 Interest expense 300 EBT $ 3,000 Taxes 40% 1,200 Net income $ 1,800 ===== Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 500,000 shares of stock outstanding and its stock trades at $48 per share. The company had a 40% dividend payout ratio in 2019. If Bowles wants to maintain this payout ratio in 2020, what will be the current dividend yield on the company’s stock? If the company maintains this 40% payout ratio, what will be the current dividend yield on the company’s stock? The company reported net income of $1.5 million in 2019. Assume that the number of shares…
Bowles Inc. is prepared to report the following income statement (shown in thousands of dollars) for the year 2019: Sales $15,200 Operating costs including depreciation 11,900 EBIT $ 3,300 Interest expense 300 EBT $ 3,000 Taxes 40% 1,200 Net income $ 1,800 ===== Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 500,000 shares of stock outstanding and its stock trades at $48 per share. The company had a 40% dividend payout ratio in 2019. If Bowles wants to maintain this payout ratio in 2020, what will be the current dividend yield on the company’s stock? If the company maintains this 40% payout ratio, what will be the current dividend yield on the company’s stock? The company reported net income of $1.5 million in 2019. Assume that the number of shares…
Consider the financial statements given below. The firm's closing stock price was $15.83 on January 28, 2022. The numbers of outstanding shares were 2,104 million in 2022 and 2,104 million in 2021, respectively. The income tax rates were 23.1% in 2022 and 27.1% in 2021. From the financial data presented, compute the following financial ratios for 2022. Assume a 365 days per year. Click the icon to view firm's balance sheet. Click the icon to view firm's income statement. (a) The debt ratio is %. (Round to two decimal places.) (b) What is the times-interest-earned ratio? Select the correct choice below and, if necessary, fill in the answer box to complete your choice. OA. The times-interest-earned ratio is. (Round to two decimal places.) OB. The times-interest-earned ratio is indefinite. (c) The current ratio is times. (Round to two decimal places.) (d) The quick (acid-test) ratio is times. (Round to two decimal places.) (e) The inventory-turnover ratio is times. (Round to two decimal…
Square Hammer Corporation shows the following information on its 2018 income statement: Sales = $196,000; Costs = $84,000; Other expenses = $5,100; Depreciation expense = $9,000; Interest expense = $13,300; Taxes = $29,610; Dividends = $10,300. In addition, you're told that the firm issued $7,100 in new equity during 2018 and redeemed $8,700 in outstanding long-term debt. a. What is the 2018 operating cash flow? Operating cash flow b. What is the 2018 cash flow to creditors? Cash flow to creditors
Brooks Sporting Inc. is prepared to report the following 2019 income statement (shown in thousands of dollars). Sales $12,900 Operating costs including depreciation 9,804 EBIT $3,096 Interest 264 EBT $2,832 Taxes (25%) 708 Net income $2,124 Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 330,000 shares of common stock outstanding, and its stock trades at $41 per share. The company had a 25% dividend payout ratio in 2018. If Brooks wants to maintain this payout ratio in 2019, what will be its per-share dividend in 2019? Do not round intermediate calculations. Round your answer to the nearest cent.$ If the company maintains this 25% payout ratio, what will be the current dividend yield on the company's stock? Do not round intermediate calculations. Round your answer to two decimal places. % The company reported net income of $1.95 million in 2018. Assume that the number of shares outstanding…
A trucking company is required to determine the cost of capital for its common shares. The company expects to pay a dividend of $ 1.45 by the end of the year (2021). The following table shows the dividends for the last 5 years. Year Dividend2020 $ 1.32019 1.22018 1.1 2017 1 2016 0.98 2015 0.90 After administrative costs, the company expects to earn $ 25 per share from a new issue and has a 15% market rate. a) Determine the growth rate of dividends from 2016 to 2020. (g =?) b) Determine the value or price of the shares

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