17.11
continued.
17.11
continued.
continued.
LIFO Difference FIFO
Beginning Inventory
…………
$ 1,257,261 $ 430,000
$
1,687,261
Purchases…………………….
Available ……………………..
$
Available ……………………..
$
2
,
84
8
,
05
4
—
…
4,535,315
Less Ending
Cost of Goods
$
Cost of Goods
$
Sold……………
2
, 60
0
, 00
0
b. Cost of Marketable Equity Securities Sold…………………….. $
c. Balance in Allowance Account on December 31, 2012 ………
d.
e. Unrealized Loss on Investments in Securities ……. 5,000
Assets= Liabilities + Shareholders’ Equity (Class.)
–5,000
–5,000
OCI
AOCI
17.11
continued.
To recognize unrealized loss on investments
in securities.
Solutions17-14
g. Investment in Davis Corporation ………………………. 87,000
Equity in Earnings of Afiliates…………………….. 87,000
Assets= Liabilities + Shareholders’ Equity (Class.)+24,000
Assets= Liabilities + Shareholders’ Equity
(Class.)
h.
Ca
sh
………………………………………………………………..
17-1Solutions
i. Present Value of Lease Payment at Signing …………………..$
17.11
continued.
Present Value of 19 Lease Payments Due on January 2 of
Each Subsequent Year at 8%; $10,000 X
9.6036
………….
9
6
, 03
6
j. Balance in Rental Fees Received in Advance on December
Cash received during 2013 totaled $252,000.
k. Balance in Estimated Warranty Liability on December
l. First 6 Months: 0.025 X $1,104,650.00 ……………………..
m. Interest Expe
ns
e ………………………………………………. 20,996
Mortgage Payable ……………………………………………. 19,004
17.11
continued.
n. Present Value of Payment on January 1,
2013………………….. Present Value of Seven Remainin
g
$
10,000
Lease Payment on January 1,
Total ($10,000 +
$
Lease Payment on January 1,
Total ($10,000 +
$
Solutions17-16
17.12
continued.
s. Convertible Preferred Stock (5,000 X $100) ………… 500,000
Assets= Liabilities + Shareholders’ Equity (Class.)
17-17Solutions
t. Treasury Stock ………………………………………………... 8,800
Cash ………………………………………………………….. 8,800
Assets
=
Liabilities
+ Shareholders’ Equity
(Class.)
Assets
=
Liabilities
+ Shareholders’ Equity
(Class.)
17.12
continued.
Plus Amount Arising from Issue of Common
S
t
ock
………..
200,000
17.12 (Layton Ball Corporation; case introducing earnings-per-shar
e calculations for a complex capital structure.) (amounts in US$)
17.12
e. The warrants are antidilutive and should be ignored if we
seek the maximum possible dilution of earnings per share.
exercise)
$3.05 per share.
17-19Solutions
f. Probably financial publications should use the earnings per
share that results in the maximum possible dilution. They
should ignore antidilutive securities. Do not conclude from the
presentation in this problem that one can check the dilution
characteristics of potentially dilutive securities one by one and
know for sure which combination of assumed exercise and
conversions leads to the minimum earnings per share figure.
Solutions17-20
17.11
LIFO Difference FIFO
Beginning Inventory
…………
$ 1,257,261 $ 430,000
$
1,687,261
Purchases…………………….
2
,
84
8
,
05
4
—
…
4,535,315
Less Ending
Sold……………
2
, 60
0
, 00
0
b. Cost of Marketable Equity Securities Sold…………………….. $
c. Balance in Allowance Account on December 31, 2012 ………
d.
e. Unrealized Loss on Investments in Securities ……. 5,000
Assets= Liabilities + Shareholders’ Equity (Class.)
–5,000
–5,000
OCI
AOCI
17.11
continued.
To recognize unrealized loss on investments
in securities.
Solutions17-14
g. Investment in Davis Corporation ………………………. 87,000
Equity in Earnings of Afiliates…………………….. 87,000
Assets= Liabilities + Shareholders’ Equity (Class.)+24,000
Assets= Liabilities + Shareholders’ Equity
(Class.)
h.
Ca
sh
………………………………………………………………..
17-1Solutions
i. Present Value of Lease Payment at Signing …………………..$
17.11
continued.
Present Value of 19 Lease Payments Due on January 2 of
Each Subsequent Year at 8%; $10,000 X
9.6036
………….
9
6
, 03
6
j. Balance in Rental Fees Received in Advance on December
Cash received during 2013 totaled $252,000.
k. Balance in Estimated Warranty Liability on December
l. First 6 Months: 0.025 X $1,104,650.00 ……………………..
m. Interest Expe
ns
e ………………………………………………. 20,996
Mortgage Payable ……………………………………………. 19,004
17.11
continued.
n. Present Value of Payment on January 1,
2013………………….. Present Value of Seven Remainin
g
$
10,000
Solutions17-16
17.12
continued.
s. Convertible Preferred Stock (5,000 X $100) ………… 500,000
Assets= Liabilities + Shareholders’ Equity (Class.)
17-17Solutions
t. Treasury Stock ………………………………………………... 8,800
Cash ………………………………………………………….. 8,800
Assets
=
Liabilities
+ Shareholders’ Equity
(Class.)
Assets
=
Liabilities
+ Shareholders’ Equity
(Class.)
17.12
continued.
Plus Amount Arising from Issue of Common
S
t
ock
………..
200,000
17.12 (Layton Ball Corporation; case introducing earnings-per-shar
e calculations for a complex capital structure.) (amounts in US$)
17.12
e. The warrants are antidilutive and should be ignored if we
seek the maximum possible dilution of earnings per share.
exercise)
$3.05 per share.
17-19Solutions
f. Probably financial publications should use the earnings per
share that results in the maximum possible dilution. They
should ignore antidilutive securities. Do not conclude from the
presentation in this problem that one can check the dilution
characteristics of potentially dilutive securities one by one and
know for sure which combination of assumed exercise and
conversions leads to the minimum earnings per share figure.
Solutions17-20