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See attachment Question 1 Roman Company had the following stockholders' equity as of January 1, 2010. Common Stock, $4 par value, 25,000 shares issued Paid-in

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Question 1 Roman Company had the following stockholders' equity as of January 1, 2010. Common Stock, $4 par value, 25,000 shares issued Paid-in capital in excess of par Retained earnings Total stockholder's equity $100,000 $300,000 $320,000 $720,000 During 2010, the following transactions occurred: Jan 31 Roman issued 5,000 shares of common stock at $10 per share. Feb 25 Roman repurchased 2,000 shares of treasury stock at a price of $19 per share. Mar 2 1,300 shares of treasury stock repurchased above were reissued at $17 per share. Apr 22 600 shares of treasury stock repurchased above were reissued at $20 per share. Apr 24 A 10% stock dividend was declared (the market price of the stock was $15) Apr 25 The 10% stock dividend was distributed ( market price of the stock was still $15) Required: (a) Prepare the journal entries to record the stock transactions in 2010, assuming Roman uses the cost method to account for treasury stock. (b) How many shares of common stock were outstanding as of April 30, 2010? Question 2 Minal Hair Products, a New York-based corporation is preparing financial statements for its financial year ended June 30, 2010. The equity capital on July 1, 2009 consisted of 1 million shares of common stock outstanding and 20,000 shares of $50 par value, 6%, convertible preferred stock. Each preferred stock was convertible into 2 shares of common stock. There were no preferred dividends in arrears. The debt capital consisted of $600,000 worth of 5%, $1,000 convertible bonds. Each bond was convertible into 30 shares of common stock. Assume a Tax Rate of 40%. The net income for the financial year ended June 30, 2010 was $200,000. On October 1, 2009, Minal required some funds for expansion into New Jersey and sold an additional 600,000 shares of the common stock at $20 per share. On April 1, 2010, Minal also had a 1 for 3 stock split of its common shares. These were the only stock transactions that occurred during the financial year. Required: For the financial year ended June 30, 2010, determine the: (a) Basic EPS (b) Diluted EPS (Assume that the stock transactions which took place on October 1, 2009 and April 1, 2010 would still have occurred with conversion)

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