1. On 1st January, 2013, Warren Corporation had 1,000,000 shares of common stock outstanding. On 1st March, the corporation issued 150,000 new shares to raise additional capital. On 1st July, the corporation declared and issued a 2-for-1 stock split. On 1st October, the corporation purchased on the market 400,000 of its own outstanding shares and retired them.
Required:
(a)Evaluate the weighted-average number of shares to be used in computing earnings per share for 2013.
2. On 1st April, 2012, West Co. purchased $320,000 of 6% bonds for $332,600 plus accrued interest as an available-for-sale security. Interest is paid on 1st July and January 1 and the bonds mature on 1st July, 2017.
Required:
(a) Make the journal entry on April 1, 2012.
(b) The bonds are sold on 1st November, 2013 at 103 plus accrued interest. Amortization was recorded when interest was received by straight-line method (by months and round to the nearest dollar). Fill all entries required to properly record the sale.