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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