. Converting preferred shares to common stocks requires that any excess of the even value of common shares issued on the book value of preferred shares being exchanged be

a.reflect in the income of that period.

b.reflect as spending that period.

c.treat as an adjustment to previous period adjustment.

d.treat as a reduction ofretained earnings.

2. On July 1, 20,20,interest payment date, $90,000 in Parks Co. bonds were converted to 1,800 parks Co. common shares.The common shares had an even value of $45 and a market value of $54.At the same time, the Unpaid Payable Bonus Discount was $3,600. Using the book value method, Parks must register

a.no change in Capital Contributed in Excess of Torque Value.

b.an increase of $5,400 in Capital Contributed in Excess of Torque Value.

c.an increase of $10,800 in Capital Contributed in Excess of Torque Value.

d.an increase of $7,200 in Capital Contributed in Excess of Torque Value.

3. A company awarded option compensation to four of its executives, with a market value of $600,000 and a four-year service period. In the first two years of the service period the company recognized compensation expense for $150,000 each year, with the corresponding credit (each year) to "Paid-in capital from stock options".During the third year, one of the executives resigned from the company and therefore to compensation. At the end of the third year, the company will recognize compensation expense for the amount of:

a. $150,000 c. $0

B.$75,000 a.d. Credit spending account for $75,000

4. One company awarded compensation through restricted shares to four of its executives, with a market value of $600,000 and a four-year service period. In granting the compensation plan, the company made the following entry:

Deferred compensation600,000

Common srock 30,000

Paid-in capital in excess of par value 570,000

In each of thefirst two years the company made the following entry:

Compensation expense150,000

Deferred compensation 150,000

During the third year, one of the executives resigned from the company and therefore to compensation. At the end of the third year, the company will make the following entry:

To. Compensation expense150,000

Deferred compensation 150,000

b. Deferred compensation 150,000

Compensation expense 150,000

c. Common stock 7,500

Additional paid-in capital 142,500

Compensation expense 75,000

Deferred compensation 225,000

d. Common stock 7,500

Additional paid-in capital 142,500

Deferred compensation 150,000

5.A company had anet loss of $80,000 in 2019. The company has cumulative preferred shares corresponding to an annual dividend of $20,000. However, in 2019, the company did NOT declare dividends. The average number of common shares outstanding for 2019 was 40,000. The company will present in its income and expense statement:

To. Basic loss per share $2.00 and diluted loss per share $2.50

B. Basic loss per share $2.00 and diluted loss per share $1.50

C. Basic loss per share of $2.50 and no diluted loss.

D. Basic loss per share of $1.50 and no diluted loss.

6. Assume that the cumulative preferred actions in the previous question were issued in 2017 and are convertible into 10,000 common shares.The company will present in its income and expense statement:

To. Basic loss per share $2.50 and diluted loss per share $1.60

B. Basic loss per share $1.50 and diluted loss per share $1.60

C. Basic loss per share of $2.50 and no diluted loss.

D. Basic loss per share of $1.50 and no diluted loss.

7. A company has convertible bonds to pay. Its book value (net of premium or discount and issuance costs) is $250,000. Its market value is $275,000. The bonds were converted into 100,000 common shares, each with an even value of $2. In the jornal entry to record the conversion of the bonds, using the value method on the books, the Additional paid-in capital account will be credited by:

a. $50,000

b. $75,000

c. $25,000

d. $0

Using the information provided, calculate the weighted average number of common shares outstanding for 2020.

The common shares of a company were 120,000 on January 1, 2020.

On February 1, the company issued 60,000 additional shares

Another 48,000 were issued on March 1.

On April 1, the company issued 24,000 new shares.

On May 1, the company bought 36,000 portfolio shares

Purchased another 36,000 portfolio shares on June 1.

On July 1, declared a 20% dividend in shares.

On August 1, it issued 75,000 new shares.

On August 15, it carried out a 1.50: 1 share split.

On September 1, it issued another 18,000 shares

On December 1, it acquired 6,000 portfolio shares.

Part B.

One company had 40,000 common shares outstanding for all of 2020. Additionally, the company had 20,000 convertible preferred shares outstanding, issued in 2019. Each preferred share is convertible into two common shares. On August 1, 2020, 18,000 preferred shares were converted to common shares. Also, the company issued 30,000 options on July 1, 2020. The options allow you to buy 30,000 common shares at $ 25 per share. The average market price for the second half of 2020 was $ 30 per share. On October 1, 2020, 12,000 options were exercised.

1. Calculate the weighted average number of common shares outstanding for the purpose of 2020 basic earnings per share.

2. Calculate the weighted average number of common shares outstanding for 2020 diluted earnings per share.

Part C

One company had 25,000 common shares outstanding for all of 2020. It also had 10,000 cumulative preferred shares, issued in 2018 and worth an annual dividend of $ 5 per share. The company did NOT declare a dividend in 2018, 2019 and 2020. There are also convertible bonds in circulation issued in 2019 whose interest expense for 2020 was $ 60,000. The bonds are convertible into 15,000 common shares. As of December 31, 2020, no bonds had been converted. The net income for 2020 was $ 150,000 and the tax rate is 25%.

Determine basic and diluted earnings per share for the year 2020.