Quiz FA 2: Equity EPS and Investment

Wang Corp. had $100,000 of 7%, $20 par value preference shares and 12,000 shares of $25 par value ordinary shares outstanding throughout 2022.

Total dividends declared in 2022 were $64,000.

What amount should receive for each shareholder?.

• $7.000 for preferences

  $57.000 for ordinary

• $14.000 for preferences

  $50.000 for ordinary

• $21.000 for preferences

  $43.000 for ordinay

Swarten AG issued 600 shares of par ordinary shares for €8,200.

Prepare Swarten’s journal entry.

• Dr: Share capital €8.200

  Cr: Cash €8.200

• Dr: Equity Investment €8.200

  Cr: Cash €8.200

• Dr: Cash €8.200

  Cr: Share capital ordinary €8.200

Issued 24,000 ordinary shares for land. The asking price of the land was $90,000; the fair value of the land was $80,000.

Prepare the journal entries.

• Dr: Land $90.000

  Cr: Share Capital Ordinary $80.000

• Dr: Land $90.000

  Cr: Share capital Ordinary $90.000

• Dr: Land $80.000

  Cr: Share capital $80.000

Twenty-five thousand shares reacquired by Pierce plc for £50 per share were exchanged for undeveloped land that has an appraised value of £1,700,000.

Prepare the journal entry to record the acquisition of share.

• Dr: Land £48

  Cr: Share capital £1.700.000

• Dr: Land £1.700.000

  Cr: Cash £1.700.000

• Dr: Treasury share 1.700.000

  Cr: Land 1.700.000

Company purchased 5,000 treasury shares at €40 per share. Then, resold 500 of the treasury shares at €30 per share.

What number efffect of those transaction to equity.

• Decrease equity at €200.000

• Increase €15.000

• Decrease €185.000

Kalin AG had 2022 net income of €1,000,000. During 2022, Kalin paid a dividend of €2 per share on 100,000 preference shares. During 2022, Kalin had outstanding 250,000 ordinary shares.

Compute Kalin’s 2022 earnings per share.

• €3.20

• €4.00

• €4.80

Tomba Group had 300,000 ordinary shares outstanding on January 1, 2022.

On May 1, Tomba issued 30,000 ordinary shares.

Compute the weighted-average ordinary shares outstanding on 2022.

• 330.000

• 270.000

• 320.000

Rockland SA reported net income of R$300,000 in 2022.

100,000 ordinary shares outstanding throughout the year.

Also outstanding all year was R$800,000 of 10% bonds, which are convertible into 16,000 ordinary shares.

Compute Rockland’s 2022 diluted earnings per share.

• R$3.80

• R$3.28

• R$1.89

The 2022 income statement of Wasmeier SE is €480,000.

Loss from discontinued operations of €120,000.

Wasmeier had 100,000 shares of ordinary shares.

Prepare Wasmeier’s earnings per share.

• €4.80

• €6.00

• €3.60

Number of ordinary shares issued and outstanding at December 31, 2021 is 2.400.000.

Shares issued as a result of a 10% share dividend on September 30, 2022 is 240.000.

Calculate weighted average of ordinary share outstanding on 2022.

• 2.400.000

• 2.640.000

• 240.000