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).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1.Please Complete Solution With Details
2.Final Answer Clearly Mentioned
3.Do not give solution in image format
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).
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
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,
Accounting
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