Lone Psychic Experience is a sole proprietorship established this year. Alice Lone established the firm with capital of $79,400. During the year she withdrew $22,000 as personal salary. Net income before tax for the year is $64,900. Alices average tax rate for income tax purposes is 25%.

Required 1: What is the balance of the equity account in the year end financial statements? $

Required 2: What is the balance of the equity account at the beginning of the first year? $

Required 3: What is the maximum amount Alice can withdraw during the first year of operations? $

Viceroy Ltd has a December 31 year-end. Its ledger account for Common Shares (Class A voting) showed the following information (dollars amounts are in thousands):

Opening Balance Jan1 = 400,000 shares Shares issued June 30 = 200,000 Shares issued September 30 = 88,200 Net Income for the Year =$2,000,000 Preferred Shares (Class B Non Voting Cumulative) = 50,000 shares ($600) Preferred Share Dividend entitlement for the year $192,000

Hint: check EPS formula in the chapter of Financial Statement Analysis

Required 1: What is the Basic Earnings Per Share that Viceroy will report this year? Hint: when number of shares change during the term, a simple average does not apply, instead use the weighted average number of common shares. $

Required 2: The weighted average number of common shares for the year is:

Required 3: The total earnings considered in the EPS formula for the year is: $