Question
Question # 5 Barker Inc. reported net income (30% tax rate) of $1,600,000 for calendar 2017, and an average of 500,000 common shares outstanding during
Question # 5
Barker Inc. reported net income (30% tax rate) of $1,600,000 for calendar 2017, and an average of 500,000 common shares outstanding during the year. Barker issued $2,000,000 par value, 10-year, 9% convertible bonds on January 1, 2015 at a $18,000 discount. The bonds are convertible into 60,000 common shares. Barker uses the straight-line method for amortizing the bond discount.
Instructions
Calculate basic and diluted earnings per share for 2017.
Question # 6
BIRCH CORPORATION
Comparative Statements of Financial Position
December 31
2017 2016
Cash................................................................................ $ 43,000 $ 24,000
Accounts receivable, net.............................................. 31,000 38,000
Inventory....................................................................... 118,000 82,000
Land................................................................................ 120,000 190,000
Building.......................................................................... 200,000 200,000
Accumulated depreciation........................................... (50,000) (40,000)
Equipment..................................................................... 1,030,000 600,000
Accumulated depreciation........................................... (118,000) (94,000)
$1,374,000 $1,000,000
Accounts payable.......................................................... $ 115,000 $ 100,000
4% Bonds payable......................................................... 320,000 -0-
Common shares........................................................... 750,000 750,000
Retained earnings......................................................... 189,000 150,000
$1,374,000 $1,000,000
Additional data:
1. Net income for the year was $84,000.
2. Cash dividends were paid.
3. Land was sold for $80,000.
4. Old equipment was sold for $70,000. This equipment had cost $150,000 and had accumulated depreciation of $60,000 to date of sale. New equipment was purchased to replace it.
Instructions
Prepare a statement of cash flows for calendar 2017, using the indirect method.
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