Posted: May 2nd, 2016

how much can they reduce their total inventory costs?

Gwinnett Park Co. reported net income of $916,800 for its fiscal year ended September 30, 2011. At the beginning of that year, 150,000 shares of common stock were outstanding. On February 1, 2011, an additional 30,000 shares were issues. On August 1, 2011, 12,000 shares were purchased as treasury stock. During the year, the company paid the annual dividend on 44,000 shares of 8%, $60 par value preferred stock that were outstanding during the entire fiscal year.

Required:
Calculate the earnings per share of common stock for the year ended September 30, 2011.
Lakefield Ice Ltd. sells 25,000 windows per year. The carrying cost per window is $3.70. Currently they order 1,000 windows at a time with a fixed cost per order of $38. If they switch to using economic order quantity, how much can they reduce their total inventory costs?

Revenue Recognition

Sweitzer Ltd. publishes a monthly newsletter for retail marketing managers and requires its subscribers to pay $50 in advance for a one-year subscription. During the month of September 2012, Sweitzer Ltd. sold 200 one-year subscriptions and received payments in advance from all new subscribers. Only 120 of the new subscribers paid their fees in time to receive the September newsletter; the other subscriptions began with the October newsletter.

Required:
a) Write journal entries to record the effects of the following items: 1) Subscription fees received during September 2012. 2) Subscription revenue earned during September 2012.

b) Calculate the amount of subscription revenue earned by Sweitzer during the year ended December 31, 2012, for these 200 subscriptions.