On January 1, 2022, Shamrock SA issued 10-year, €1,870,000 face value, 6% bonds, at par. Each €1,000 bond is convertibleinto 15 ordinary shares of Shamrock. Shamrock's net income in 2023 was €462,800, and its tax rate was 40%. Interest expense onthe liability component in 2023 was €130,900. The company had 104,000 ordinary shares outstanding throughout 2022. None ofthe bonds were converted in 2022.(a) Compute diluted earnings per share for 2022. (Round answer to 2 decimal places, eg. 2.55.)Diluted earnings per share(b) Compute diluted earnings per share for 2022, assuming the same facts as above, except that €1,040,000 of 6% convertiblepreference shares were issued instead of the bonds. Each €100 preference share is convertible into 5 ordinary shares ofShamrock. (Round answer to 2 decimal places, eg. 2.55.)Diluted earnings per share

Answered: (a) Compute diluted earnings per share…

(a) Compute diluted earnings per share for 2022. (Round answer to 2 decimal places, es. 2.55.) Diluted earnings per share

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, 2022, Shamrock SA issued 10-year, €1,870,000 face value, 6% bonds, at par. Each €1,000 bond is convertible
into 15 ordinary shares of Shamrock. Shamrock's net income in 2023 was €462,800, and its tax rate was 40%. Interest expense on
the liability component in 2023 was €130,900. The company had 104,000 ordinary shares outstanding throughout 2022. None of
the bonds were converted in 2022.
(a) Compute diluted earnings per share for 2022. (Round answer to 2 decimal places, eg. 2.55.)
Diluted earnings per share
(b) Compute diluted earnings per share for 2022, assuming the same facts as above, except that €1,040,000 of 6% convertible
preference shares were issued instead of the bonds. Each €100 preference share is convertible into 5 ordinary shares of
Shamrock. (Round answer to 2 decimal places, eg. 2.55.)
Diluted earnings per share

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