January 1, 2005, Poe issued 200,000 shares of nonconvertible preferred stock. During 2005, Poe declared and paid $ 75,000 cash dividends on the common stock and $ 60,000 on the preferred stock. Net income for the year ended December 31, 2005 was $ 330,000. What should be Poe ' s 2005 earnings per common share?
Question 17
On December 1, 2005, Clay Co. declared and issued a 6 % stock dividend on its 100,000 shares of outstanding common stock. There was no other common stock activity during 2005. What number of shares should Clay use in determining earnings per share for 2005?
Question 18
Wyatt Co. has a probable loss that can only be reasonably estimated within a range of outcomes. No single amount within the range is a better estimate than any other amount. The loss accrual should be
Question 19
On September 1, 2005, Cano & Co., a U. S. corporation, sold merchandise to a foreign firm for 250,000 francs. Terms of the sale require payment in francs on February 1, 2006. On September 1, 2005, the spot exchange rate was $. 20 per franc. At December 31, 2005, Cano ' s year end, the spot rate was $. 19, but the rate increased to $. 22 by February 1, 2006, when payment was received. How much should Cano report as a foreign exchange gain or loss in its 2006 income statement?
Question 20
During 2005, Rex Co. introduced a new product carrying a two-year warranty against defects. The estimated warranty costs related to dollar sales are 2 % within 12 months following sale and 4 % in the second 12 months following sale. Sales and actual warranty expenditures for the years ended December 31, 2005 and 2006 are as