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Description / paper instructions
Please answer the questions. You can better use the hand writing.
Chapter 16 Extra Credit Homework
1.Amy Chang of the controller’s office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2017. Amy has complied the information listed below.
The following specific activities took place during 2017.
(1) February 1: A 5% common stock dividend was issued. The dividend had been declared on December 1, 2016, to all stockholders of record on December 31, 2016.
(2) April 1: A 2-for-1 split of the common stock became effective on this date.
(3) August 1: A total of 300,000 shares of common stock were issued to acquire a building.
(4) October 1: 50% of the convertible debenture bonds were converted to common shares.
(5) November 1: A total of 24,000 shares of common stock were purchased on the open market at $9 per share. These shares were to be held as treasury stock and were still in the treasury as of December 31, 2017.
(6) Preferred stock cash dividends – Cash dividends to preferred stockholders were declared and paid as scheduled.
(a) Compute the basic earnings per share for the year ended December 31, 2017.
(b) Compute the diluted earnings per share for the year ended December 31, 2017.
Extra Credit Homework Assignment (Due on July 30)
Answer is as follows (We will cover in the chapter 16):
Compensation Expense 65,000
Paid-in Capital—Stock Options 65,000
(a) Record the journal entries and adjusting entries needed at the end of year for the transactions listed above.
(b) Prepare the stockholder’s equity section of Phelps Corporation’s balance sheet as of December 31, 2017. Assume the beginning balance of retained earnings is $100,000 and net income for the year is $250,000.