**For Lady Hawkins Ph.D Only** Accounting Homework
Aiavker621
week_1_lab_1.1.xlsxProblem 1
| Summerborn Manufacturing, Co., completed the following transactions during 2012: | |
| Jan 16 | Declared a cash dividend on the 5%, $100 per preferred stock (900 shares outstanding). Declared a $0.30 per share dividend on the 80,000 shares of common stock outstanding. The date of record is January 31, and the payment due date is February 15. |
| Feb 15 | Paid the cash dividends. |
| Jun 10 | Split common stock 2 for 1. Before the split, Summerborn had 80,000 shares of $6 par common stock outstanding. |
| Jul 30 | Distributed a 50% stock dividend on the common stock. The market value of the common stock was $9 per share. |
| Oct 26 | Purchased 1,000 shares of treasury stock at $13 per share. |
| Nov 8 | Sold 500 shares of treasury stock for $15 per share. |
| Nov 30 | Sold 300 shares of treasury stock for $8 per share. |
| Requirement: | |
| 1. Record the transactions in Summerborn's general journal. |
Problem 2
| The capital structure of Blacksmith, Inc., at December 31, 2011, included 18,000 shares of $1 preferred stock and 38,000 shares of common stock. Common stock outstanding during 2012 totaled 38,000 shares. Income from continuing operations during 2012 was $108,000. The company discontinued a segment of the business at a gain of $26,000 and also had an extraordinary gain of $12,000. The Blacksmith board of directors restricts $99,000 of retained earnings for contingencies. Retained earnings at December 31, 2011, were $99,000, and the company declared preferred dividends of $18,000 during 2012. |
| Requirements: |
| 1. Compute Blacksmith's earnings per share for 2012. Start with income from continuing operations. All income and loss amounts are net of income tax. |
| 2. Show two ways of reporting Blacksmith's retained earnings restriction. |
Problem 3
| The following information was taken from the records of Clarkson Motorsports, Inc., at November 30, 2012: | ||||
| Selling expenses | $125,000 | Common stock, $10 par, 21,000 shares authorized and issued | $210,000 | |
| General expenses | 134,000 | Preferred stock, $4, no-par 6,000 shares issued | 240,000 | |
| Income from discontinued operations | 5,000 | Income tax expense: | ||
| Retained earnings, beginning | 90,000 | Continuing operations | 70,000 | |
| Cost of goods sold | 430,000 | Income from discontinued operations | 2,000 | |
| Treasury stock, common (1,000) shares | 11,000 | |||
| Net sales revenue | 834,000 | |||
| Requirement: | ||||
| 1. Prepare a multi-step income statement for Clarkson Motorsports for the fiscal year ended November 30, 2012. Include earnings per share. |
