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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Concept explainers

Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:

Question

Please solve correctly with everything .

also calculate diluted earnings per share.

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
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Attempts: 0 of 1 used
Submit Answer

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