a. Corporation has 400,000 shares of common stock outstanding throughout 2021. In addition, the corporation has 5,000, 20-year, 9% bonds issued at par in 2019. Each $1,000 bond is convertible into 20 shares of common stock after 9/23/22. During the year 2021, the corporation eamed $900,000 of net income. The tax rate was 25%. b. Porporation has 400,000 shares of common stock outstanding throughout 2021. In addition, the corporation has warrants exercisable at $20 each to obtain 80,000 shares of common stock when the average market price of the common stock was $25., During the year 2021, the corporation earned $900,000 of net income. Instructions Compute the basic earnings per share for 2021, and the diluted earnings per share under each of the above situations (note-BEPS is the same for both a and b).
a. Corporation has 400,000 shares of common stock outstanding throughout 2021. In addition, the corporation has 5,000, 20-year, 9% bonds issued at par in 2019. Each $1,000 bond is convertible into 20 shares of common stock after 9/23/22. During the year 2021, the corporation eamed $900,000 of net income. The tax rate was 25%. b. Porporation has 400,000 shares of common stock outstanding throughout 2021. In addition, the corporation has warrants exercisable at $20 each to obtain 80,000 shares of common stock when the average market price of the common stock was $25., During the year 2021, the corporation earned $900,000 of net income. Instructions Compute the basic earnings per share for 2021, and the diluted earnings per share under each of the above situations (note-BEPS is the same for both a and b).
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 28E
Related questions
Question
1.Please Complete Solution With Details
2.Final Answer Clearly Mentioned
3.Do not give solution in image format
![a. Corporation has 400,000 shares of common stock outstanding throughout 2021. In
addition, the corporation has 5,000, 20-year, 9% bonds issued at par in 2019. Each $1,000
bond is convertible into 20 shares of common stock after 9/23/22. During the year 2021,
the corporation earned $900,000 of net income. The tax rate was 25%.
b. Corporation has 400,000 shares of common stock outstanding throughout 2021. In
addition, the corporation has warrants exercisable at $20 each to obtain 80,000 shares of
common stock when the average market price of the common stock was $25., During the
year 2021, the corporation earned $900,000 of net income.
Instructions
Compute the basic earnings per share for 2021, and the diluted earnings per share under each
of the above situations (note-BEPS is the same for both a and b).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F956b79d0-b8ff-4513-ab04-2143e5c531c4%2Fd980afad-a262-46f9-a66c-41e451b394b1%2Fdt4y7o7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:a. Corporation has 400,000 shares of common stock outstanding throughout 2021. In
addition, the corporation has 5,000, 20-year, 9% bonds issued at par in 2019. Each $1,000
bond is convertible into 20 shares of common stock after 9/23/22. During the year 2021,
the corporation earned $900,000 of net income. The tax rate was 25%.
b. Corporation has 400,000 shares of common stock outstanding throughout 2021. In
addition, the corporation has warrants exercisable at $20 each to obtain 80,000 shares of
common stock when the average market price of the common stock was $25., During the
year 2021, the corporation earned $900,000 of net income.
Instructions
Compute the basic earnings per share for 2021, and the diluted earnings per share under each
of the above situations (note-BEPS is the same for both a and b).
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