Answer:
a-1. We have:
Recession EPS = $1.49
Normal EPS = $2.13
Expansion EPS = $2.45
a-2. We have:
Recession percentage change in EPS = -30.00%
Expansion percentage change in EPS = 15.00%
b-1. We have:
Recession EPS = $1.12
Normal EPS = $1.76
Expansion EPS = $2.08
b-2. We have:
Recession percentage change in EPS = -36.36%
Expansion percentage change in EPS = 18.18%
Explanation:
Note: See the attached excel file for the calculations of the EPS and the percentage changes in EPS.
From the attached excel file, we have:
a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued.
Recession EPS = $1.49
Normal EPS = $2.13
Expansion EPS = $2.45
a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession.
Recession percentage change in EPS = -30.00%
Expansion percentage change in EPS = 15.00%
b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization.
Recession EPS = $1.12
Normal EPS = $1.76
Expansion EPS = $2.08
b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession.
Recession percentage change in EPS = -36.36%
Expansion percentage change in EPS = 18.18%
Answer and Explanation:
The journal entry is given below:
Stock dividends Dr $60.00
To Common stock $60.00
(Being the issue of stock dividend is recorded)
Here the stock dividend is debited as it reduced the stockholder equity and credited the common stock as it increased the stockholder equity
Also the par per share after the split is $1
Answer:
The journal entry is shown below.
Explanation:
According to the scenario, the journal entry for the given data are as follows:
Journal entry
Jul.4 Cash A/c Dr $147
Card charges A/c Dr. $3
To Sales revenue A/c $150
(Being card transaction is recorded)
Computation:
Cash = $150 - 2% × $150 = $147
Card charges = $150 × 2% = $3
Answer:
A. Forensic accountants
Explanation:
Forensic accountants possess auditing and investigative skills. Their work entails examining financial records and statements in search of evidence for any financial misleading. Forensic accountants are trained and qualified accountants or auditors. They acquire investigative skills through specialized training.
