Reporting earnings per share
Return to the ABC data in Short Exercise S13-12. ABC had 8,000 shares of common stock outstanding during 2018. ABC declared and paid preferred dividends of $4,000 during 2018.
Show how ABC reports EPS data on its 2018 income statement.
Report shows Income from continuous operation EPS is $0.93, Discontinued operations EPS is $0.27 and Net Income EPS is $1.21.
Dec 31, 2018
Earnings per share of common stock (8,000 outstanding shares)
Income from continuous operation
Journalizing dividend and treasury stock transactions, preparing a statement of retained earnings, and preparing stockholders’ equity
The balance sheet of Goldstein Management Consulting, Inc. at December 31, 2017, reported the following stockholders’ equity:
Common Stock—$10 Par Value; 350,000 shares
authorized, 32,000 shares issued and outstanding
Total Stockholders’ Equity $ 810,000
Paid-In Capital in Excess of Par—Common 330,000
Total Paid-In Capital
During 2018, Goldstein completed the following selected transactions:
Feb. 6 Declared a 15% stock dividend on common stock. The market value of
Goldstein’s stock was $25 per share.
15 Distributed the stock dividend.
Jul. 29 Purchased 2,300 shares of treasury stock at $25 per share.
Nov. 27 Declared a $0.10 per share cash dividend on the common stock outstanding.
2. Prepare a retained earnings statement for the year ended December 31, 2018. Assume Goldstein’s net income for the year was $90,000.
Question: Accounting for cash dividends
Java Company earned net income of $85,000 during the year ended December 31, 2018. On December 15, Java declared the annual cash dividend on its 4% preferred stock (par value, $120,000) and a $0.25 per share cash dividend on its common stock (50,000 shares). Java then paid the dividends on January 4, 2019.
2. Journalize for Java the entry paying the cash dividends on January 4, 2019.
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