At the end of the year, the records of NCIS Corporation provided the following s
ID: 2529278 • Letter: A
Question
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, 390,000. 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, $295,360. Dividends declared and paid: $170,400. Retained earnings beginning balance: $745,000 (all shares were issued at $15 per share. Total cash collected: $2,220,000. Required 1. Complete the following tabulation Shares authorized Shares issued Shares outstanding 2. What is the balance in the Additional Paid-in Capital account. Additional paid-in capital 3. What is earnings per share (EPS). (Round your answer to 2 decimal places.) arnings per share 4. What was the dividend paid per share. (Round your answer to 2 decimal places.) ividend per shareExplanation / Answer
NCIS Corporation
Shares Authorized
3,90,000
Shares Issued
148,000
($2,220,000/$15)
Shares Outstanding
142,000
(148,000 - 6,000 treasury shares)
Additional Paid-in Capital = $740,000
Computation –
Common stock par value = $10
Shares issue price = $15
Excess price over par value = $5 per share ($15 -$10)
Additional Paid-in Capital = 148,000 shares x $5 = $740,000
EPS = Net Income/shares outstanding
Net income = $295,360
Shares outstanding = 142,000
EPS = $295,360/142,000 = $2.07 per share
Dividend paid per share = dividends/shares outstanding
Dividends = $170,400
Shares outstanding = 142,000
Dividend per share = $170,400/142,000 = $1.20
The amount to be reported as Treasury Stock = $90,000 (6,000 shares x $15)
Stockholders' Equity
Treasury Stock
$90,000
The par value per share = $10/2 = $5
Number of shares after stock split (2 for 1) = 142,000 x 2 = 284,000 shares
No Entry
Explanation: The stock split does not change the total par value amount. Hence, no entry is needed. Also, the stock split takes place without capitalizing retained earnings.
Market price of share = $21
Date
Account Titles and Explanation
Debit
Credit
Retained Earnings
$298,200
Common Stock
$142,000
Contributed Capital in excess of Par
$156,200
(10% x 142,000 x ($21 -$10)
(To record issue of 10% stock dividend, market price per share = $21; 142,000 shares x $21 x 10% = $298,200)
Shares Authorized
3,90,000
Shares Issued
148,000
($2,220,000/$15)
Shares Outstanding
142,000
(148,000 - 6,000 treasury shares)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.