The Statement of Earnings for Bancroft Company for the Year

question 12

Essay

The statement of earnings for Bancroft Company for the year ended December 31, 2013 appears below.
*Includes $6,000 of interest expense and $3,200 of income tax expense.
Additional information:
1. Average number of common shares outstanding in 2013 was 15,000 shares.
2. The market price of Bancroft's shares was $36 per share at the end of 2013
3. Cash dividends of $6,000 were paid; $1,200 of which were paid to preferred shareholders.

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Definitions:

Article 9

A section of the Uniform Commercial Code in the United States that governs secured transactions involving personal property.

UCC

The Uniform Commercial Code, a set of laws governing sales and commercial transactions in the United States.

Perfection

A legal process that establishes a secured party's interest in the collateral, giving priority over other third-party claims.

Exoneration

The act of being cleared or absolved from blame, responsibility, obligation, or, specifically in legal terms, criminal charges.