Question

16. Benedict Corporation reports the following information: $750,000 $210,000 $ 90,000 250,000 Net income Dividends on common stock Dividends on preferred stock Weighted average common shares outstanding Benedict should report earnings per share of a. $1.80. b. $2.16 c. $2.64. d. $3.00. 17. Leonard Corporation reports the following information: Correction of overstatement of depreciation expense in prior years, net of tax Dividends declared $ 645,000 480,000 Net income 1,500,000 6,000,000 Retained earnings, 1/1/19, as reported Leonard should report retained earnings, 12/31/19, at a. $5,355,000. b. $6,375,000. c. $7,020,000. d. $7,665,000. 18. For Mortenson Company, the following information is available: $390,000 15,000 36,000 138,000 600,000 Cost of goods sold Dividend revenue Income tax expense Operating expenses Sales revenue In Mortenson's multiple-step income statement, gross profit a. should not be reported. b. should be reported at $51,000. c. should be reported at $210,000. d. should be reported at $225,000.

Answer 1

Earning per share = (Net Income - Preferred dividend)/Weighted Average common shares outstanding Ans 16 Earning per share = ($750,000 - $90,000)/250,000 Earning per share = $2.64 Correct option is (C)i.e $2.64 Ans 17 Retained Earnings, 1/1/19 $6,000,000 Add: Correction of overstatement of depreciation expense in prior year, net of taxes | $645,000 Add: Net income for the year $1,500,000 Less: Dividend Declared $480,000 Retained Earnings, 12/31/19 $7,665,000 Correct option is (D) i.e $7,665,000 Ans 18 Gross profit = Sales revenue - cost of good sold Gross profit = $600,000 - $390,000 Gross profit = $210,000 Correct option is (C) i.e $210,000