Intermediate Accounting Homework

TRADITIONAL HOMEWORK ITEMS – Spring 2024 – ACT 3391
General Instructions for the Traditional Homework – refer to the instructions for traditional item no. 3.
8. (2 points) M recorded entries for (1) the issuance of common stock for $50,000, (2) the payment of $4,000 of accounts payable, (3)
the collection of $3,500 of accounts receivable, (4) the incurrence and payment of $1,200 of utilities expense, and (5) the declaration
of a $5,000 cash dividend on M’s common stock. What net effect do these five entries have on M’s total owners’ equity? Make sure
your final answer (a) is one net dollar amount AND (b) indicates if total owners’ equity is increased OR decreased by your
net dollar amount AND (c) clearly explains/supports your one net dollar amount.
9. (4 points) Changes in all of E’s balance sheet accounts during the current year, EXCEPT the change in E’s retained earnings
account follow. Compute E’s net income (or net loss) for the year assuming the only two entries E made to her retained earnings
account during the year were for a cash dividend declared and paid of $21,000 and her net income (or net loss) for the year. (This is
NOT a statement of cash flows problem – do NOT format it like a statement of cash flows problem.)
Cash decreased
Accounts receivable increased
Fixed assets increased
Accumulated depreciation increased
Accounts payable decreased
Unearned revenue increased
Common stock increased
Additional paid-in-capital increased
$40,000
$15,000
$24,000
$12,000
$27,000
$18,000
$10,000
$30,000
10. (2 points) Penning Corporation reported the following:
Net income
Dividends on common stock
Dividends on preferred stock
Weighted average common shares outstanding
$1,500,000
$50,000
$200,000
500,000
What should Penning report as its earnings per share? Round your answer to the nearest penny.
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