Chrome File Edit View History Bookmarks People Window Help Chapter 11-Connect ?

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Chrome File Edit View History Bookmarks People Window Help Chapter 11-Connect ? ezto.mheducation.com/hm.tpx a 9 At the end of the year, the records of NCIS Corporation provided the following selected and incomplete data: Common stock (par $10); no changes in account during the year. Shares authorized, 260,000. Shares issued: Treasury stock: 6,000 shares (repurchased at $15 per share) The treasury stock was acquired after a stock split was announced. Net income, $265,200. Dividends declared and paid: $145,520. Retained earnings beginning balance: $815,000. (all shares were issued at $15 per share. Total cash collected: $2,130,000. Required: 1. Complete the following tabulation: Shares authorized Shares issued Shares outstanding 2. What is the balance in the Additional Paid-in Capital account 3. What is earnings per share (EPS).(Round your answer to 2 decimal places.) 4. What was the dividend paid per share. (Round your answer to 2 decimal places.) 5

Explanation / Answer

Ans. 1 Authorized Share   = 260000

Issued share 142000

Share outstanding = 136000 (142000-6000)

2. Calculation of Additional paid in capital or Premium amt

Premium on issued capital (5X142000)                 = $710000

Less: Premium paid on treasury share(5X6000)     = ($30000)

Balance in Addtional Paid in capital                     = $680000

3. Earning per share = 265200/136000 = $1.95 per share (after buyback)

4. Dividend per share = 145520/136000 = 1.07 per share

5. Section in which treasury stock report in Balance sheet: Treasury stock Should be reported in Shareholder section and deducted from shareholder fund. amt is (6000X10) = $60000, and Premium amt $30000 should be deducted from Additional paid in capital account

6. Face value of after split is $5 each share

Shareoutstanding (136000X2) = 272000

7. Journal Entry for recording Split

                 Common stock @10each A/c 1360000

   To Common stock @5 each A/c 1360000

   (Share is split 2 share for every 1 share, new face value is @5 each)    

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