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2 years ago

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Vent, Inc. reported net income of $770,000 for 20X1. Vent sold 15,000 shares of treasury stock acquired in a previous year on Ju

ly 1 and 15,000 new shares on November 1. At year-end, 180,000 shares were outstanding. Vent had 20,000 shares of $100 par value 7% preferred stock outstanding all year. Vent paid dividends to the preferred shareholders. 1. The weighted average number of common shares used to compute earnings per share for 20X1 is:_____.2. Calculate the basic earnings per share for 2015.3. If each share of preferred stock is convertible into 2 shares of common stock, what is the diluted earnings per share for 2015?

1 answer:

gulaghasi [49]2 years ago

8 0

Answer:

1. Weighted average number of outstanding shares = 150,000*12/12 + 15,000*6/12 + 15,000*2/12

Weighted average number of outstanding shares = 150,000 + 7,500 + 2,500

Weighted average number of outstanding shares = 160,000 shares

2. Net income = $770,000

Preferred dividend = 20,000 shares*$100*7%

Preferred dividend = $140,000

Income attributable to common stockholders = Net income - Preferred dividend

Income attributable to common stockholders = $770,000 - $140,000

Income attributable to common stockholders = $630,000

Basic Earnings per share = Income attributable to common stockholders / Weighted average number of outstanding shares

Basic Earnings per share = $630,000/160,000

Basic Earnings per share = $3.94

3. Diluted EPS = Net income / [Weighted average number of common shares outstanding during the period + All dilutive potential common stock]

Diluted EPS = $770,000 / (160,000 + 20,000*2)

Diluted EPS = $770,000 / 200,000 shares

Diluted EPS = $3.85 per share

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lbvjy [14]

Answer: The correct answer is "b. Debit $8, 780".

Explanation: The entry that should appear on november 15 for the remittance of the month's social security taxes is "Debit $8, 780"

Because the balance of $ 4390 in its Social Security tax payable account + the additional $ 4390 on its October 31 pay date = $ 8780.

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2 years ago

During the month, Cellum, Inc. sold 100 cells at a price of $100 each. Each cell was sold at a 1% sales discount. Cellum had ret

gavmur [86]

Answer:

Net Sales for the month ended is equal to $9,702.

Explanation:

Sale = 100 x $100 = $10,000

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Net Sales for the month ended is equal to $9,702.

$20 is an expense and it is not an contra revenue account. So, it is not considered in net sales calculation.

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2 years ago

Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $30 each. His total cost each day is $320

Fudgin [204]

Answer:

In the short run, as long as the contribution margin is positive he should continue in the industry. In the long run, if the company keeps losing money, he should leave the industry.

Explanation:

Giving the following information:

Bob mows lawns for $30 each. His total cost each day is $320, of which $70 is a fixed cost. He mows 10 lawns a day.

First, we need to calculate the unitary variable cost:

Total variable cost= 320 - 70= 250

Unitary varaible cost= 250/10= $25

Contribution margin= 30 - 25= $5

In the short run, as long as the contribution margin is positive he should continue in the industry. In the long run, if the company keeps losing money, he should leave the industry.

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2 years ago

A car dealer who sells only late-model luxury cars recently hired a new salesman and believes that this salesman is selling at l

Natasha2012 [34]

Answer:

$t=\frac{5000-5600}{\frac{800}{\sqrt{16}}}=-3$

Explanation:

Data given and notation

$\bar X=5000$ represent the sample mean

$s=800$ represent the standard deviation for the sample

$n=16$ sample size

$\mu_o =5600$ represent the value that we want to test

$\alpha$ represent the significance level for the hypothesis test.

t would represent the statistic (variable of interest)

$p_v$ represent the p value for the test (variable of interest)

State the null and alternative hypotheses.

We need to conduct a hypothesis in order to determine if the mean is lower than 5600, the system of hypothesis would be:

Null hypothesis: $\mu \geq 5600$

Alternative hypothesis: $\mu < 5600$

We don't know the population deviation, so for this case is better apply a t test to compare the actual mean to the reference value, and the statistic is given by:

$t=\frac{\bar X-\mu_o}{\frac{s}{\sqrt{n}}}$ (1)

t-test: "Is used to compare group means. Is one of the most common tests and is used to determine if the mean is (higher, less or not equal) to an specified value".

Calculate the statistic

We can replace in formula (1) the info given like this:

$t=\frac{5000-5600}{\frac{800}{\sqrt{16}}}=-3$

4 0

2 years ago

Waldron inc. is considering selling to a group of new customers that will bring in credit sales of $24,000 with a return on sale

Andrew [12]

Answer:

30%

Explanation:

The computation of return on investment is shown below:-

Return on Sales = Credit sales × Return on sales

= $24,000 × 5%

= $1,200

Investment in Accounts Receivable

= $24,000 × 1 ÷ 6

= $4,000

Return on Investment = Return on Sales ÷ Investment in Accounts Receivable × 100

= $1,200 ÷ $4,000 × 100

= 30%

Therefore for computing the return on investment we simply divide the investment in account receivable by return on sales.

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2 years ago