50 Minutes, Strong
a.
Stockholders’ equit
y
:
Capital stock:
Common stock, $10 par, 500,000 shares authorized,
150,000 shares issued, of which 10,000 are held
in the treasur
y
1,500,000$
Stock dividend to be distributed
(
1
)
140,000
(
1
)
(
150,000 shares – 10,000 shares
)
x 10% = 14,000 shares
@
r
(
)
(
)
b.
Stockholders’ equit
y
:
Capital stock:
(
1
)
(
150,000 shares + 14,000 shares
)
x 2 = 328,000 shares
@
$5 pa
r
(
)
(
)
December 31, 2016
PROBLEM 12.8
A
MANDELLA CORPORATIO
N
December 31, 2015
Partial Balance Sheet
MANDELLA CORPORATIO
N
MANDELLA CORPORATIO
N
Partial Balance Sheet
25 Minutes, Strong
a.
(Dollars in
Th
ousan
d
s
)
PROBLEM 12.9
A
ESPER CORP.
For the Year Ended December 31, 20xx
Partial Income Statement
ESPER CORP.
30 Minutes, Easy
a.
Discontinued o
p
erations:
O
p
eratin
g
income from car rental
(
net of income tax
)
670,000$
Gain on sale of car rental business
(
net of income tax
)
4
,
330
,
000
5,
000
,
000
Income before extraordinar
y
items 12,460,000$
Extraordinar
y
loss: destruction of airliner b
y
terrorists
(3
$
9
340
000
$
1
2
(0
2
34
$
0
19
1
68
$
SOLUTIONS TO PROBLEMS SET B
PROBLEM 12.1B
PACIFIC AIRLINE
S
For the Year Ended December 31, 20xx
Income Statement
PACIFIC AIRLINE
S
30 Minutes, Medium
a.
Net sales 37,400,000$
Costs and ex
p
enses
(
includin
g
a
pp
licable income tax
)
21
,5
00
,
000
Income from continuin
g
o
p
erations 15
,
900
,
000
$
(
(
,
,
$
(
,
,
$
$
(
$
(
$
PROBLEM 12.2B
BEACH, INC.
For the Year Ended December 31, 2015
Condensed Income Statement
BEACH, INC.
$
b
.
d. The single 2016 $75.00 figure for EPS is unfavorable in comparison with 2015 performance.
PROBLEM 12.2B
BEACH, INC.
For the Year Ended December 31, 2015
Statement of Retained Earnings
BEACH, INC. (concluded)
35 Minutes, Strong
a.
Net sales 10,200,000$
Costs and ex
p
enses:
Discontinued o
p
erations:
PROBLEM 12.3B
DEXTER, INC.
For the Year Ended December 31, 2015
Income Statement
DEXTER, INC.
b
.
c. The “gain on sale of treasury stock” represents the excess of reissue price received over the
cost Dexter paid to acquire some of its own shares of stock. Although a corporation may
PROBLEM 12.3B
DEXTER, INC.
For the Year Ended December 31, 2015
Statement of Retained Earnings
DEXTER, INC. (concluded)
20 Minutes, Easy
Total Number Book Value
Stockholders’ of Shares per
E
qu
ity
O
u
t
s
t
an
di
ng
Sh
are
(
roun
d
e
d)
Be
g
innin
g
balance 1,200,000$ 20,000 60.00$
Jan. 16 Declared and distributed 5% stock div.
1
,
000
Balance 1,200,000$ 21,000 57.14$
Feb. 9 Acquired 300 shares of treasury stoc
k
39
000
300
21
000
(504
000)
174
000
876
000
$
42
000
20
86
$
PROBLEM 12.4B
SUNSTONE, INC.
Note to instructor: Net income actually increases book value throughout the year, not merely on the
date upon which net income is closed into retained earnings.
(33
(300)
20 Minutes, Medium
a. Capital Stock
A
dditional Total
($1 pa
r
Paid-in Retained Treasury Stockholders’
va
l
ue
)
C
ap
i
ta
l
E
arn
i
ngs
S
toc
k
E
qu
i
ty
Balances, Januar
y
1, 20x
x
130,000$ 1,170,000$ 1,400,000$ –$ 2,700,000$
Prior period adjustment (net of income tax benefit) (47,000) (47,000)
Issuance of common stock; 20,000 shares @ $15 20,000 280,000 300,000
(163
000)
(163
000)
16
$
1
$
2
$
(32
$
3
$
g
PROBLEM 12.5B
DRY WALL, INC.
DRY WALL, INC.
Statement of Stockholders’ Equity
For the Year Ended December 31, 20xx
b. Declaration/distribution of a 10% stock dividend has no effect on total stockholders’
equity. Declaration of a cash dividend reduces total stockholders’ equity by the amount of
PROBLEM 12.5B
DRY WALL, INC. (concluded)