Problem 1 Company A purchases 10,000 shares of Company B common stock for $100,000 cash. This investment represents 30% of Company B's common stock. Complete the journal entry to record the purchase of this stock. Account Title Problem 2 AC 212 During the year Company B reports net income of $1,000,000. Complete the journal entry, which records Company A's proportionate share of Company B's net income. Account Title Debit Account Title Debit Company A purchases 1,000 shares of Company B common stock for $50,000 cash. This investment accounts for less than 10% of Company B's stock and is classified as "available-for-sale." At year end the market value for the stock is $62,000. Complete the journal entry to record the market value adjustment. Debit Credit Credit Credit Problem 3 Company A signs a contract to purchase 1,000 tons of coal for $50 per ton. The $50 purchase price is good for one year. At the time the contract was signed, no journal entry was required. The price of coal has now gone up to $55 per ton. Record the journal entry required. Problem 4 Account Title Debit Company A owns 30% of the stock of Company B. During the year Company B reports a net loss of $100,000. Record the journal entry for Company A's portion of the loss. Account Title Debit Company B announced and paid a cash dividend of $60,000. Record the journal entry that would be mad by Company A for this transaction. Account Title Credit Debit Credit Credit Problem 5 A Corporation has net income of $1,570,000 and declared preferred dividends of $35,000. There are 500,000 shares of common stock outstanding. Calculate the earnings per share. Problem 6 A Company grants options to purchase 10,000 shares of common stock at $15 per share. The average market price for a share of common stock is $25 per share. Using the treasury stock method, compute the number of shares, which would be added by the options. Problem 7 Using the information from problems 7 & 8 calculate diluted earnings per share.