Question

we yeit ended December 31, 2017 Problem 14-9A ness and At Art Motion Inc. specializes in truck tires and had the followi tires and had the following shareholders equity on January 1, 2017: Accounting for stock dividends, stock splits, and errors from a prior period, preparing a com- bined statement of income and retained earnings: calculating earnings per share O 2. Net income $730,600 hostile huge 44 Requir 1. As a to th fort $1,500,000 Preferred shares, $2.50, convertible to common on a 2-for-1 basis, 100,000 shares authorized, 50,000 shares issued and outstanding Common shares, unlimited number of shares authorized, 150,000 shares issued and outstanding Total contributed capital Retained earnings Total shareholders' equity 1,500,000 3,000,000 1,200,000 $4,200,000 cuss the 2. Sup bid the Probl CNZC The following information is available for the year ending December 31, 2017: Feb. Apr. May Jun. Feb. 1 Declared a cash dividend of $275,000, payable on March 1 to the shareholders of record on February 15. Indicate the amount payable to each class of shareholder Mar. 1 Paid the cash dividend declared on February 1. May 2 Declared a 20 percent stock dividend on the common shares, distributable on July 4 to the shareholders of record on June 15. The market value of the shares was $11.00 per share. Jul. 4 Distributed the common shares dividend declared on May 2. Aug. 8 The company discovered that amortization expense recorded in 2015 was understated in error by $30,000. (Ignore any tax consequences.) Dec. 31 ArtnMotion Inc.'s records show the following: $3,150,000 Sales for the year.... 1,290,000 Cost of goods sold..... 792,000 Operating expenses...... 132,000 Income from discontinued operations.. 76,000 Nov. Requi Prob The L share Earn select Feb. Mar. Loss on sale of discontinued operations... Close only the Income Summary account, assuming the company pays taxes at the rate of 35 percent. Sep. Required vined earnings for the year ended formation. For purposes of the eamings 1. Record the transactions in the general journal. ul. Explanations are not required. 2. Prepare a combined statement of income and retained earnings for the December 31, 2017. Include earnings per share information ber of common shares is 180,000. per share calculation, the weighted average number Oct. Nov.

Answer 1

Answer-1-

Date	General Journal	Debit	Credit
Feb-01	Retained Earnings	275,000
	Dividend Payable		275,000
Mar-01	Dividend Payable	275,000
	Cash		275,000
May-02	Retained Earnings *	330,000
	Common Stock Dividend Distributable		300,000
	Additional Paid-in-capital		30,000
Jul-04	Common Stock Dividend Distributable	300,000
	Common Stock		300,000
Aug-08	Retained Earnings	30,000
	Amortization Expenses		30,000

*20% stock dividend = 20% * (150,000 outstanding shares) = 30,000 shares of stock dividend declared

Market of shares = $11.00 per share

Stock dividend value = 30,000 shares * $11.00 per share = $330,000 retained earnings

Per value of Share = $10 per share

Stock dividend distributable = 30,000 shares * $10 par value = $300,000

Additional paid-in-capital = 30,000 shares * (11.00 - $10.00) = $30,000

2-

ArtnMotion Inc.
Combined Statement of Income and Retained Earnings
For the Year Ended December 31, 2017
	Amount	Amount
Sales		3,150,000
Less: Cost of goods sold		-1,290,000
Gross Profit		1,860,000
Less: Operating Expenses		-792,000
Income From continuing operations before income taxes		1,068,000
Income Tax Expenses (35%)		-373,800
Income From continuing operations		694,200
Discontinued Operations:
Income from operations of discounted ($132,000-$76,000)	56,000
Income tax expense	-19,600
Income (Loss) from discontinued operations		36,400
Net Income		730,600
Earnings Per Share :
EPS		4.06