*Ex. 1Dividends on preferred stock.

The stockholders' equity section of Lemay Corporation shows the following on December 31, 2013:

Preferred stock6%, $100 par, 5,000 shares outstanding$ 500,000

Common stock$10 par, 50,000 shares outstanding500,000

Paid-in capital in excess of par320,000

Retained earnings 98,000

Total stockholders' equity$1,418,000

Instructions

Assuming that all of the company's retained earnings are to be paid out in dividends on 12/31/13 and that preferred dividends were last paid on 12/31/11, show how much the preferred and common stockholders should receive if the preferred stock is cumulative and fully participating.

Ex. 2Weighted average shares outstanding.

On January 1, 2013, Warren Corporation had 1,000,000 shares of common stock outstanding. On March 1, the corporation issued 150,000 new shares to raise additional capital. On October 1, the corporation purchased on the market 400,000 of its own outstanding shares and retired them.

Instructions

Compute the weighted average number of shares to be used in computing earnings per share for 2013.

Ex. 3Earnings per share.

Santana Corporation has 400,000 shares of common stock outstanding throughout 2013. In addition, the corporation has 5,000, 20-year, 9% bonds issued at par in 2011. Each $1,000 bond is convertible into 20 shares of common stock after 9/23/14. During the year 2013, the corporation earned $900,000 after deducting all expenses. The tax rate was 30%.

Instructions

Compute the proper earnings per share for 2010.

4. Flower Co. purchased $1,000,000 of 8%, 5-year bonds from Ritter, Inc. on May 1, 2012, plus accrued interest with interest payable on July 1 and January 1. The bonds sold for $1,041,580 at an effective interest rate of 7%.

What entry should Fowler make to record the purchase of the bonds on May 1, 2012?