Multiple Choice Question 15 Jerri Rice has worked 44 hours t

Multiple Choice Question 15

Jerri Rice has worked 44 hours this week. She worked at least of 8 hours each day. Her regular hourly wage is $12 per hour with one and one-half times her regular rate for any hours which exceed 40 hours per week. What are Jerri\'s gross wages for the week?

Exercise 11-7

On October 31, the stockholders’ equity section of Sunland Company’s balance sheet consists of common stock $784,000 and retained earnings $408,000. Sunland is considering the following two courses of action:

The current market price is $16 per share.

Prepare a tabular summary of the effects of the alternative actions on the company’s stockholders’ equity and outstanding shares.

Sunland Company’s
Balance Sheet

Open Show Work

Solution

Multiple choice question 15=

Normal hourly wage rate= $40

Overtime hourly wage rate =

Normal hourly wage rate × 1.5

= $12 × 1.5

= $18

Total hours worked = 44 hours

Normal hours= 40 hours

Overtime hours = 44 - 40 hours

= 4 hours

Normal wages=

Normal hours worked × Normal hourly wage rate

= 40 Hours × $12

= $480

Overtime wages=

= overtime hours × overtime hourly wage rate

= 4 hours × $18

= $72

Gross wages for this week =

Normal wages + Overtime wages

= $480 + $72

= $552

Exercise 11-7

Explanation =

1. When stock dividend is declared, it means dividend in stock is paid. Number of shares would increase. In this exercise, 5% stock dividend is declared. Therefore stock dividend is = 98000 × 5% = 4900 shares.

Total shares after stock dividend = 98000 + 4900

= 102900 shares.

2. When stock dividend is declared, retained earnings are to be reduced by the stock dividend multiplied by market value of per share.

4900 shares × $16 = $78400

Value of retained earnings = $408000 - $78400

= $329600

Value of paid in capital is increased by stock dividend at par value of share.

4900 shares × $8 = $39200

Value of paid in capital = $784000 + $39200

= $823200

3. When there is stock split, it does not bring any change in the value of stockholders equity, only number of shares increase and par value per share decrease accordingly.

Total number of shares after stock split =

98000 shares × 2 = 196000 shares