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AleksAgata [21]
2 years ago
7

Paul Corporation reported net income of $260,000 during the current calendar year. The company had 10,000 common shares outstand

ing on January 1 and sold an additional 6,000 shares on July 1. What is the company’s basic EPS?
Business
1 answer:
uysha [10]2 years ago
8 0

Answer:

the company’s basic EPS is $37.14

Explanation:

Basic Earnings per share = Earnings attributable to holders of common stock ÷ Weighted Average Number of Common Stocks

<u>Step 1 : Calculation of Earnings attributable to holders of common stock</u>

This is given. It is the Net Income during the current year of $260,000

<u>Step 2 : Calculation of Weighted Average Number of Common Stocks</u>

Outstanding Stocks at the beginning of the year                 10,000

Less Sold Stocks - On Weight Basis (6/12 × 6,000)               3,000

Weighted Average Number of Common Stocks                    7,000

Therefore,

Basic Earnings per share = $260,000 ÷ 7,000

                                           = $37.14

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C. By allowing the same money to be both stored as a deposit and  loaned to businesses is the correct answer.

Explanation:

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Which of the following is not commonly regarded as being part of a firm’s credit policy? a. Credit period b. Collection policy c
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D!!! All of the above
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3 years ago
Mention and explain documents for buying and selling​
Jlenok [28]

Answer:

Inquiry Letter

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Purchase Requisition

This is a document used by a department in a company to request that those in charge of procurement acquire some goods for them.

Quotation

This is a document sent by a supplier to the prospective buyer informing them of the goods they have and their selling price.

Purchase Order

This is the document that shows a formal request for goods from a supplier.

Delivery Note

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Invoice

A supplier prepares and sends this to the buyer to show them the goods they ordered and the prices so that the buyer knows how much they owe.

4 0
2 years ago
Nash Co. sells $435,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds
garri49 [273]

Answer:

\left[\begin{array}{ccccccc}\\ &&$Carrying Value&$Cash&$Int. exp&$Amortization&$E.Carrying\\& 1&493574.88&26100&19743&6357&487217.88\\& 2&487217.88&26100&19488.72&6611.28&480606.6\\& 3&480606.6&26100&19224.26&6875.74&473730.86\\& 4&473730.86&26100&18949.23&7150.77&466580.09\\& 5&466580.09&26100&18663.2&7436.8&459143.29\\& 6&459143.29&26100&18365.73&7734.27&451409.02\\& 7&451409.02&26100&18056.36&8043.64&443365.38\\& 8&443365.38&26100&17734.62&8365.38&435000\\\end{array}\right]

<u>Journal entries:</u>

cash       493,574.88 debit

 bonds payable   435,000.00 credit

 premium on bp     58,574.88 credit

--to record issuance--

Interest expense 19743

Amortization 6357

cash 26100

--to record Dec 31st, 2020--

Interest expense 19488.72

Amortization 6611.28

cash 26100

--to record June 30th, 2021--

bonds payable    130,500.00 debit

premium on bp       13,681.98 debit

interest expense    17,400.00 debit

      gain on redemption           25,081.98 credit

       cash                                 136,500.00 credit

--to record redemption--

premium on BP      4,813.04 debit

interest expense  13,456.96 debit

        cash                         18,270 credit

-- to record December 31st, 2021--

Explanation:

First, we solve for the proceeds from the bonds payable:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 26,100 (435,000 x 12% / 2)

time 8 ( 4 years x 2)

yield to maturity  0.04 ( 8% / 2)

26100 \times \frac{1-(1+0.04)^{-8} }{0.04} = PV\\

PV $175,724.6412

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   435,000.00

time   8.00

rate  0.04

\frac{435000}{(1 + 0.04)^{8} } = PV  

PV   317,850.24

PV c $175,724.6412

PV m  $317,850.2392

Total $493,574.8804

We now build the amortization schedule.

We take this value, we multiply by the interest rate and then, solve for amortization and ending carrying value.

<u>To record the redemption:</u>

accrued interest:

435,000 x 0.12 x 4/12 (months from June to oct) = 17,400

premium:

480,606.6 - 435,000 = 45,606.6

proportional of premium:

45,606 / 435,000 x 130,500 = 13.681,98

we now solve for the gain/loss on redemption:

130,500 + 13,681.98 + 17,400 = 161.581,9 value redeem

                                      for cash 136,500

gain on redemption 25.081,98

bonds payable    130,500.00 debit

premium on bp       13,681.98 debit

interest expense    17,400.00 debit

      gain on redemption           25,081.98 credit

       cash                                 136,500.00 credit

Now, we solve for Dec 31st, 2021 entry.

bonds payable: 435,000 - 130,500 = 304,500

premium: 45,606 - 13,681.98 = 31.924,02

interest expense:

(304,500 + 31,924.02) x 0.04 = 13,456.96

cash outlay:

304,500 x 0.06 = 18,270

amortization 18,270 - 13,456.96 = 4,813.04

6 0
3 years ago
Hi-Tek plans to pay a $6 per share dividend one year from today, and will increase the dividend by 4 percent per year forever. W
Lunna [17]

Answer:

The current share price if the required return on this stock is 16 percent is $50.

Explanation:

price = dividend next year /(required rate of return - growth rate)

         = 6/(16% - 4%)

         = 50

Therefore, The current share price if the required return on this stock is 16 percent is $50.

5 0
3 years ago
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