Following is information taken from Vaughn Inc.'s December 31, 2023 SFP:5% bonds payable, $5,774,000 maturing December 31, 2025,each $1,000 bond convertible into 20 common shares8% bonds payable, $5,326,000, maturing December 31, 2026,each $1,000 bond convertible into 26 common shares at any time up to December 31, 2026Cumulative preferred shares, $5, no-par value, convertible at1 preferred share for 4 common shares, 51,400 shares outstandingCommon shares, no par-value, 3,196,000 shares outstanding(a)Calculate the income effect of the dividends on the preferred shares.Vaughn's net income for 2023 was $8,681,000, and the company was subject to an income tax rate of 20%. Both classes of bonds wereoutstanding the entire year, as were the preferred shares. The weighted-average number of common shares outstanding during theperiod was 3,744,000.Dividends on preferred shares $$5,774,000LA$5,326,000$1,028,000

Companies can draw in investors with dividends on preferred shares by providing a steady income…

Answered: 5% bonds payable, $5,774,000 maturing…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Convertible Preferred Stock, Convertible Bonds, and EPS Francis Company has 19,200 shares of common stock outstanding at the beginning of 2019. Francis issued 2,400 additional shares on May 1 and 1,600 additional shares on September 30. It also has two convertible securities outstanding at the end of 2019. These are: Convertible preferred stock: 2,000 shares of 8.0%, $50 par, preferred stock were issued on January 2, 2016, for $55 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted. Convertible bonds: Bonds with a face value of $200,000 and an interest rate of 5.5% were issued at par in 2018. Each $1,000 bond is convertible into 20 shares of common stock. To date, no bonds have been converted. Francis earned net income of $70,000 during 2019. The income tax rate is 30%. Required: 1. Compute the number of shares of common stock that Francis should…
Computing Diluted EPS: Convertible Bonds and Convertible Preferred Stock Jones Corporation's capital structure follows. December 31 2020 Outstanding shares of stock Common stock, outstanding shares 275,000 Convertible preferred stock, outstanding shares 25,000 8% Convertible bonds $2,500,000 During 2020, Jones declared and paid dividends of $3.00 per share on its preferred stock. The preferred shares are convertible in 50,000 shares of common stock. The 8% bonds are convertible into 75,000 shares of common stock. Net income for 2020 is $1,870,000. Assume that the income tax rate is 25%. Required a. Compute basic EPS for 2020. b. Compute diluted EPS for 2020. Note: Round earnings per share amounts to two decimal places. Net Income Available toCommon Stockholders Weighted Avg. CommonShares Outstanding PerShare Basic EPS Answer Answer Answer Diluted EPS Answer Answer Answer
Jay Give me correct answer with explanation
Convertible Preferred Stock, Convertible Bonds, and EPS Francis Company has 24,000 shares of common stock outstanding at the beginning of 2019. Francis issued 3,000 additional shares on May 1 and 2,000 additional shares on September 30. It also has two convertible securities outstanding at the end of 2019. These are: Convertible preferred stock: 2,500 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2016, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted. Convertible bonds: Bonds with a face value of $250,000 and an interest rate of 5.5% were issued at par in 2018. Each $1,000 bond is convertible into 20 shares of common stock. To date, no bonds have been converted. Francis earned net income of $72,500 during 2019. The income tax rate is 30%. Required: a. Assume the same facts as above except that net income included a loss…
1, 202 Remy Corporation issued $1,000,000 of 8% nonconvertible bonds at 104, which are due on February 28, 2041. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Remy common stock, par value $25. The bonds without the warrants would normally sell at 95. On March 1, 2021, the fair value of Remy's common stock was $40 per share and the fair value of the warrants was $2.00. What amount should Remy record on March 1, 2021 as paid-in capital from stock warrants? $73,600 $85,200 $52,000 O $104,000 ASA
1. 2. 3. 1. 2. On August 1, 2025, Lane Corporation called its 10% convertible bonds for conversion. The $8,000,000 par bonds were converted into 320,000 shares of $20 par common stock. On August 1, there was $800,000 of the unamortized premium applicable to the bonds. The fair value of the common stock was $20 per share. Ignore all interest payments. No. Account Titles and Explanation 3. Packard, Inc. decides to issue convertible bonds instead of common stock. The company issues 10% convertible bonds, par $4,000,000, at 97. The investment banker indicates that if the bonds had not been convertible, they would have sold at 94. Gomez Company issues $9,000,000 of bonds with a coupon rate of 8%. To help the sale, detachable stock warrants are issued at the rate of ten warrants for each $1,000 bond sold. It is estimated that the value of the bonds without the warrants is $8,883,000 and the value of the warrants is $567,000. The bonds with the warrants sold at 101. Bonds Payable Premium on…
Convertible Preferred Stock, Convertible Bonds, and EPS Francis Company has 12,000 shares of common stock outstanding at the beginning of 2019. Francis issued 1,500 additional shares on May 1 and 1,000 additional shares on September 30. It also has two convertible securities outstanding at the end of 2019. These are: Convertible preferred stock: 1,250 shares of 9.0%, $50 par, preferred stock were issued on January 2, 2016, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted. Convertible bonds: Bonds with a face value of $125,000 and an interest rate of 6.0% were issued at par in 2018. Each $1,000 bond is convertible into 25 shares of common stock. To date, no bonds have been converted. Francis earned net income of $55,000 during 2019. The income tax rate is 30%. Required: 1. Compute the number of shares of common stock that Francis should use…
EPS with Convertible Bonds and Preferred Stock The Ehrlich Corporation issued 10-year, $5,000,000 par, 7% callable convertible bonds on January 2, 2022. The bonds have a par value of $1,000, with interest payable annually. Each bond is convertible into 18 shares of common stock. The bonds were issued at 100. Ehrlich's effective tax was 20%. Net income in 2022 was $9,500,000, and the company had 2,000,000 shares outstanding during the entire year.Instructions: a. Compute both basic and diluted earnings per share. Show calculations. b. Recompute the schedule as if the security was convertible cumulative preferred stock, $5,000,000, 8%, $100 par value. Each share of preferred stock is convertible into 1 share of common stock.
Computation of basic and diluted EPS; convertible instruments Kate Corp. had 200,000 ordinary shares, 20,000 convertible preference shares, and P1,000,000 of 10% convertible bonds outstanding during 2021. The preference share is convertible into 40,000 ordinary shares. During 2021, Kate paid dividends of P1.20 per share on ordinary shares and P4.00 per share on preference shares. Each P1,000 bond is convertible into 45 ordinary shares if converted before 2023 and 40 shares if converted after 2023. The profit for 2021 was P800,000 and the income tax rate was 25%. Required: Compute the basic and diluted EPS to be presented in Kate Corp.'s statement of profit or loss for the year ended Dec. 31, 2021.
answer in text form please (without image)
Jones Corporation’s capital structure follows. December 31 2020 Outstanding shares of stock Common stock, outstanding shares 110,000 Convertible preferred stock, outstanding shares 10,000 8% Convertible bonds $1,000,000 During 2020, Jones declared and paid dividends of $3.00 per share on its preferred stock. The preferred shares are convertible into 20,000 shares of common stock. The 8% bonds are convertible into 30,000 shares of common stock. Net income for 2020 is $850,000. Assume that the income tax rate is 25%. a) Compute basic EPS for 2020. b) Compute diluted EPS for 2020. c) Prepare the bottom of the company’s income statement in proper form, beginning with the net income.
Rahul bhaliya

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS