Beckham Pet Food Suppliers reported $7,300,000 net income for the current year. The company indicated that it has $6,600,000, 6% convertible debt issued at par and $550,000 par value, 8% nonconvertible, cumulative preferred shares outstanding. The firm did not declare dividends for the current year. It issued the bonds on May 31, and the preferred shares were outstanding for the entire year. Based on this information, determine the numerator of the earnings per share fraction for both basic earnings per share and diluted earnings per share. Assume that all financial instruments described are dilutive. The tax rate is 35%.
Beckham Pet Food Suppliers reported $7,300,000 net income for the current year. The company indicated that it has $6,600,000, 6% convertible debt issued at par and $550,000 par value, 8% nonconvertible, cumulative preferred shares outstanding. The firm did not declare dividends for the current year. It issued the bonds on May 31, and the preferred shares were outstanding for the entire year. Based on this information, determine the numerator of the earnings per share fraction for both basic earnings per share and diluted earnings per share. Assume that all financial instruments described are dilutive. The tax rate is 35%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Beckham Pet Food Suppliers reported $7,300,000 net income for the current year. The company indicated that it has $6,600,000, 6% convertible debt issued at par and $550,000 par value, 8% nonconvertible, cumulative preferred shares outstanding. The firm did not declare dividends for the current year. It issued the bonds on May 31, and the preferred shares were outstanding for the entire year. Based on this information, determine the numerator of the earnings per share fraction for both basic earnings per share and diluted earnings per share. Assume that all financial instruments described are dilutive. The tax rate is 35%.
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