ACCT-311 Lecture Notes - Lecture 3: Retained Earnings, Income Statement, Sole Proprietorship
Get access
Related Documents
Related Questions
Spencer Software Company has assets of $850,000 and liabilities of $460,000. |
a. | Prepare the owners' equity section of the company's balance sheet under each of the following independent assumptions: | |
1. | The business is organized as a sole proprietorship, owned by Johanna Spencer. | |
2. | The business is organized as a partnership, owned by Johanna Spencer and Mikki Yato. Spencerâs equity amounts to $240,000. | |
3. | The business is a corporation with 27 stockholders, each of whom originally invested $10,000 in exchange for shares of the companyâs capital stock. The remainder of the stockholdersâ equity has resulted from profitable operation of the business. |
St. PetersburgCorporation | |||
Use theinformation obtained from the comparative financial statementsincluded in the St. Petersburg Corporation's 2016 annual reportthat is presented below to answer the questions that follow. Allamounts are in thousands of dollars. | |||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Total assets | $800,000 | $975,000 | |
Total common stockholders' equity | 405,000 | 578,000 | |
Total stockholders' equity | 504,000 | 702,000 | |
31-Dec | |||
FOR THE FISCAL YEARS ENDED | 2016 | 2015 | |
Interest expense, net of tax | $5,000 | $4,700 | |
Interest expense | 6,100 | 5,800 | |
Income tax expense | 22,600 | 32,600 | |
Net income | 110,000 | 27,000 | |
Common dividends | 12,600 | 7,200 | |
Net sales | 2,667,600 | 1,971,000 | |
Preferred dividends | 9,000 | 14,400 | |
16. Refer to the financialinformation for St. Petersburg Corporation. | |||
REQUIRED: | |||
Calculate theearnings per share for St. Petersburg for 2016 and 2015 assuming anaverage of 100,000 common shares were outstanding during 2016 andan average of 80,000 common shares were outstanding during 2015.Explain the change as it probably relates to the market value ofthe stock. | |||
1.If a stock is sold on the secondary market between one investor and another, what effect does that have on the financial statements of the company that originally issued the stock?
Its revenues increase | ||
Its "in excess" equity increases | ||
It has a new asset | ||
There is no effect since the sale or trade is among investors only |
----------------------
2.
QUESTION 10
Which of the following is an advantage of the corporate form of business organization?
double taxation | ||||||||||||||||||||||||||||||||||||||
amount of regulation | ||||||||||||||||||||||||||||||||||||||
limited liability | ||||||||||||||||||||||||||||||||||||||
entrenched management 3. Ownership and profit distribution in a sole proprietorship are generally seen on its balance sheet respectively as
|