The Alford Group had 220,000 shares of common stock outstanding at January 1, 20

Question

The Alford Group had 220,000 shares of common stock outstanding at January 1, 2016. The following activities affected common shares during the year. There are no potential common shares outstanding 2016 Feb. 28 Purchased 24,000 shares of treasury stock. Oct. 31 Sold the treasury shares purchased on February 28 Nov. 30 Issued 96,000 new shares Dec. 31 Net income for 2016 is $1,590,000 2017 Jan. 15 Declared and issued a 2-for-1 stock split Dec. 31 Net income for 2017 is $1,590,000 Required 1. Determine the 2016 EPS. (Enter your answers in thousands.) Numerator / Denominator | Earnings per Share 2. Determine the 2017 EPS. (Enter your answers in thousands.) Numerator / Denominator = Earnings per Share 3. At what amount will the 2016 EPS be presented in the 2017 comparative financial statements? (Enter your answers in thousands.) Numerator / Denominator | Earnings per Share

Explanation / Answer

1.

Note:- 2014 2015

Cost of goods sold(FIFO) 49 51

Cost of goods sold(Average) 74    78

   Difference $25 increase $27 increase   

2. Comparative income statement

     

3. Retained earnings at January 2015 (using FIFO)

  Retained earnings Balance Jan 1,2014 = 0

Add: Net income [490 -49-286] =155

less: Dividend = 30

Retained earnings Balance Jan 1,2015 = $125

4)   Retained earnings Balance previously reported using FIFO Jan 1,2015 = $125

Less : Adjustment to balance for change in inventory method [$74 inaverage - $49 in FIFO] = $25

    Retained earnings Balance using average method Jan 1,2015 [490-74-286-30] = $100   

Date General journal Dr. Cr. 1 .Jan 2016 Retained Earnings [25 + 27] $52 To Inventory $52

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.