On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000

On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.

Instructions
Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and book value per share. Use the following column headings:

Before Action, After Stock Dividend, and After Stock Split.

Click here for the solution: On October 31, the stockholders' equity section of Omar Company consists of common stock $600,000 and retained earnings $900,000

You are provided with the following information for Pavey Inc. for the month ended October 31, 2008

P6-5A You are provided with the following information for Pavey Inc. for the month ended October 31, 2008. Pavey uses a periodic method for inventory.

Date Description Units Unit Cost or Selling Price
October 1 Beginning inventory 60 $25
October 9 Purchase 120 26
October 11 Sale 100 35
October 17 Purchase 70 27
October 22 Sale 60 40
October 25 Purchase 80 28
October 29 Sale 110 40

Instructions
(a) Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, and (iv) gross profit rate under each of the following methods.
(b) Compare results for the three cost flow assumptions. What cost flow results in the lowest inventory value. What cost flow results in the lowest cost of goods sold. What cost flow results in the lowest gross profit. What cost flow results in the lowest gross profit rate.

Click here for the solution: You are provided with the following information for Pavey Inc. for the month ended October 31, 2008

The following selected accounts and their current balances appear in the ledger of Carpet Land Co. for the fiscal year ended October 31, 2012

Problem 6-1A Multiple-Step Income Statement and Report-Form of Balance Sheet

The following selected accounts and their current balances appear in the ledger of Carpet Land Co. for the fiscal year ended October 31, 2012:

AND SO ON

Instructions
1. Prepare a multiple-step income statement.
2. Prepare a statement of owner's equity.
3. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $16,000.
4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report form and account-form balance sheets differ.

Check: 1. Net Income: $775,000

Click here for the solution: The following selected accounts and their current balances appear in the ledger of Carpet Land Co. for the fiscal year ended October 31, 2012