unit 2 accounting

On
January 1, 2012, Chang Corp. had 480,000 shares of common stock
outstanding. During 2012, it had the following transactions that affected
the Common Stock account.

February 1

Issued 132,000 shares

March 1

Issued a 20% stock dividend

May 1

Acquired 113,000 shares of treasury stock

June 1

Issued a 3-for-1 stock split

October 1

Reissued 60,600 shares of treasury stock

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(a)

Determine
the weighted-average number of shares outstanding as of December 31,
2012.

The weighted-average number of shares outstanding

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On January 1, 2012, Bailey Industries had stock
outstanding as follows.

6% Cumulative preferred stock, $111 par value,
issued and outstanding 12,000 shares

$1,332,000

Common stock, $11 par value, issued and
outstanding 267,600 shares

2,943,600

To acquire the net assets of three smaller
companies, Bailey authorized the issuance of an
additional 242,400 common shares. The acquisitions took place as
shown below.

Date of Acquisition

Shares Issued

Company A April 1, 2012

94,800

Company B July 1, 2012

115,200

Company C October 1, 2012

32,400

On May 14, 2012, Bailey realized a
$126,000 (before taxes) insurance gain on the expropriation of investments
originally purchased in 2000.

On December 31, 2012, Bailey recorded net income
of $304,800 before tax and exclusive of the gain.

Assuming a 41% tax rate, compute the
earnings per share data that should appear on the financial statements of
Bailey Industries as of December 31, 2012. Assume that the expropriation is
extraordinary.(Round
answer to 2 decimal places, e.g. $2.55.)

Bailey Industries
Income Statement
For the year ended December 31, 2012

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Amy Dyken, controller at Fitzgerald
Pharmaceutical Industries, a public company, is currently preparing the
calculation for basic and diluted earnings per share and the related disclosure
for Fitzgerald’s financial statements. Below is selected financial information
for the fiscal year ended June 30, 2012.

FITZGERALD PHARMACEUTICAL
INDUSTRIES
SELECTED BALANCE SHEET
INFORMATION
JUNE 30, 2012

Long-term debt

Notes payable, 10%

$1,162,000

8% convertible bonds payable

5,114,000

10% bonds payable

6,095,000

Total long-term debt

$12,371,000

Shareholders’ equity

Preferred stock, 5% cumulative,
$56 par value,
105,300 shares authorized, 26,325 shares
issued and outstanding

$1,474,200

Common stock, $1 par, 10,066,000 shares
authorized,
1,006,600 shares issued and outstanding

1,006,600

Additional paid-in capital

4,017,400

Retained earnings

6,016,900

Total shareholders’ equity

$12,515,100

The following transactions have also occurred at
Fitzgerald.

1.

Options were granted on July 1, 2011, to
purchase 209,200 shares at $15 per share. Although no options
were exercised during fiscal year 2012, the average price per common share
during fiscal year 2012 was $20 per share.

2.

Each bond was issued at face value. The 8% convertible
bonds will convert into common stock at 56 shares per
$1,000 bond. The bonds are exercisable after 5 years and were issued in
fiscal year 2011.

3.

The preferred stock was issued in 2011.

4.

There are no preferred dividends in arrears; however, preferred
dividends were not declared in fiscal year 2012.

5.

The 1,006,600 shares of common stock were outstanding
for the entire 2012 fiscal year.

6.

Net income for fiscal year 2012 was $1,505,000, and the average
income tax rate is 45%.

For the fiscal year ended June 30, 2012,
calculate the following for Fitzgerald Pharmaceutical Industries.(Round the answers to 2 decimal places, e.g. $2.45.)

(a)Basic earnings per share.

Basic earnings per share

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(b) Diluted
earnings per share.

Diluted earnings per share

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