The following information pertains to the payrolls of  Company for November 2019:

Employees Wage earned  Wage earned Federal Income State/local

By 10/31/2019  in November 2019  Tax   Income Taxes

Jane $115,000  $20,000  $1,500  $650

Tom  70,000     10,000   500   250

Bill  6,000     1,500    0   0

Actual state unemployment tax rate is 4%, while the federal unemployment tax rate is 1%. The taxable income limit for social security tax is $120,000/person, year, while the taxable income limit of SUTA and FUTA is $7,000/ person, year.

Instructions: Prepare the necessary journal entries for November payrolls of  Company if salaries and wages are paid in cash after withholding all payroll taxes and dues.


sold 20,000 shares of $1,000 par value, 8%, 10-year debenture bonds on 1/1/2018. The bonds will pay interests on 12/31 of each year. The market interest rate was 4% as of 1/1/2018. Coyote retired these bonds for $19,500,000 on 1/1/2020.

Instructions: prepare any necessary journal entries for the followings using the effective interest method.

1) The issuance of the bonds.

2) Interest expense accrued in 2018 and 2019.

3) Retirement of the bonds on 1/1/2020.


On December 31, 2019, Hawk Company presented the following data.

– Net income after income tax and interest expenses $2,400,000.

– Common stock (C/S)with $100 par:

# of shares outstanding as of 1/1/2019  600,000

# of shares issued for cash on 7/1/2019   400,000

# of shares reacquired on 10/1/2019 (Tresury stocks)   120,000

– 200,000 shares of 3% Convertible Preferred stock (P/S) with $50/share par value.

Conversion ratio to C/S = 2 for 1; i.e., two shares of P/S will become one share of C/S

– The income tax rate is 30%.

– Hawk issued 3,000 shares of $1,000 par value, 2%, 5 year convertible bonds for $1,000 per share on January 1, 2019. The interests are payable annually at the end of each year. Each $1,000 bond can be converted to 10 shares of common stock within five years from 1/1/2019.

– None of these convertible securities have been converted to date.

– Hawk granted call options to purchase 10,000 shares of common stock for $80/share to its managers on 1/1/2019 when the option value were $5,000. None of these options have been exercised to date. The average market price of common stock was $120/share in 2019.


1) Compute Simple EPS for 2019.

2) Compute Diluted EPS for 2019.

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