Blossom Corporation issued $4 million of 10-year, 7% callable convertible subordinated debentures on January 2, 2023. The debentures have a face value of $1,000, with interest payable annually. The current conversion ratio is 14:1, and in two years it will increase to 18:1. At the date of issue, the bonds were sold at 100 to yield a 7% effective interest rate. The bond discount is amortized using the effective interest method. Blossom's effective tax rate was 30%. Net income in 2023 was $7.6 million, and the company had 3 million shares outstanding during the entire year. For simplicity, ignore the requirement to record the debentures' debt and equity components separately. (a) Calculate basic earnings per share. (Round answers to 2 decimal places, eg. 15.25) Basic earnings per share Save for Later Attempts: 0 of 1 used Submit Answer

Blossom Corporation issued $4 million of 10-year, 7% callable convertible subordinated debentures on January 2, 2023. The debentures have a face value of $1,000, with interest payable annually. The current conversion ratio is 14:1, and in two years it will increase to 18:1. At the date of issue, the bonds were sold at 100 to yield a 7% effective interest rate. The bond discount is amortized using the effective interest method. Blossom's effective tax rate was 30%. Net income in 2023 was $7.6 million, and the company had 3 million shares outstanding during the entire year. For simplicity, ignore the requirement to record the debentures' debt and equity components separately. (a) Calculate basic earnings per share. (Round answers to 2 decimal places, eg. 15.25) Basic earnings per share Save for Later Attempts: 0 of 1 used Submit Answer

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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