Bravo, Incorporated, owns all of the stock of Echo, Incorporated. For 2024, Bravo reports Income (exclusive of any Investment Income)of $480,000. Bravo has 80,000 shares of common stock outstanding. It also has 5,000 shares of preferred stock outstanding that paya dividend of $15,000 per year. Echo reports net income of $290,000 for the period with 80,000 shares of common stock outstanding.Echo also has a liability from its 10,000, $100 bonds that pay annual Interest of $8 per bond. Each of these bonds can be convertedInto two shares of common stock. Bravo owns none of these bonds. Assume a tax rate of 21 percent.Required:What amount should Bravo report as diluted earnings per share?Note: Round your answer to 2 decimal places.Diluted earnings per share

If the company's securities such as bonds or debentures are convertible then the earnings per share…

Answered: Bravo, Incorporated, owns all of the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Parkovash, Incorporated, obtained 100 percent of Salerno Company's common stock on January 1, 2023, by issuing 11,700 shares of $10 par value common stock. Parkovash's shares had a $15 per share fair value. On that date, Salerno reported a net book value of $134,050. However, its equipment (with a 5-year remaining life) was undervalued by $7,550 in the company's accounting records. Also, Salerno had developed computer software with an assessed value of $33,900, although no value had been recorded on Salerno's books. The computer software had an estimated remaining useful life of 10 years. The following balances come from the individual accounting records of these two companies as of December 31, 2023: Salerno $ (240,000) 125,000 0 50,000 Items Revenues Expenses Investment income Dividends declared The following balances come from the individual accounting records of these two companies as of December 31, 2024: Salerno $(310,000) 162, 100 0 Items Parkovash $ (730,000) 493,000 Not given…
On January 1, 2019, N Company had five outstanding ordinary shares. On December 31, 2019, Norton declared dividends on the ordinary shares. The corporation decided to give the ordinary shareholders a choice between receiving a cash dividend of P10,000 per share or a property dividend in the form of a noncash asset. Each noncash asset has a fair value of P12,000. The corporation estimated that 40% of the ordinary shareholders will take the option of the cash dividend and 60% will elect for the noncash asset. How much is the dividends payable on December 31, 2019?
HET purchased 80% of the 10,000 outstanding shares LNET had on Jan. 1, 2019 for $300,000 cash. On that day, LNET had 10,000 preferred shares, 4% cumulative, redeemable at a price which is $1 higher than the cost, and dividends were one year in arrears. HET did not own any of those preferred shares. Both companies have Dec. 31 as the reporting day. LNET reported the followings: Common shares: $180,000 on Jan 1, 2019 $40,000 on Jan 1, 2019 Retained earnings: $80,000 on Jan 1, 2019 $70,000 for 2019 Dividends declared: $6,000 on Dec 30, 2019 Preferred shares: Net income: Assume: the entity theory is used. 7) What is the total acquisition differential on Jan. 1, 2019?
On January 1, 2022, Mojito Corporation purchased 20% (20,000 shares) of the outstanding stock of Dulcinea Corporation for $153,000. During 2022, Dulcinea Corporation paid total dividends of $45,000 and earned $80,000 in net income. At the end of 2022, Dulcinea Corporation’s stock had a fair market value of $155,000. Required: Prepare the journal entries that Mojito would make during 2022 assuming that they do NOT have significant influence over Dulcinea as a result of their stock ownership (i.e. fair value method). Prepare the journal entries that Mojito would make during 2022 assuming that they do have significant influence over Dulcinea as a result of their stock ownership (i.e. equity method).
Colt Corporation purchased Massey Inc. and agreed to give stockholders of Massey 50,000 additional shares in 2027 if Massey's net income in 2026 is $600,000 or more; in 2025 Massey's net income is $615,000. Colt has net income for 2025 of $1,500,000 and an average number of common shares outstanding of 500,000 shares. What should Colt report as earnings per share for 2025? A) Basic Earnings Per Share - $2.73; Diluted Earnings Per Share - $3.00 B) Basic Earnings Per Share - $3.00; Diluted Earnings Per Share - $2.73 J C) Basic Earnings Per Share - $3.00; Diluted Earnings Per Share - $3.00 D) Basic Earnings Per Share - $2.73; Diluted Earnings Per Share - $2.73
On March 31, 2024, Chow Brothers, Incorporated, bought 7% of KT Manufacturing’s capital stock for $51.2 million. KT’s net income for the year ended December 31, 2024, was $80.4 million. The fair value of the shares held by Chow was $35.8 million at December 31, 2024. KT did not declare or pay a dividend during 2024. Required: Prepare all appropriate journal entries related to the investment during 2024. Assume that Chow sold the stock on January 20, 2025, for $30.4 million. Prepare the journal entries to record the sale.
Primary Inc. owns 80 percent outstanding stock of Secondary, Inc. For the current year, Primary reports income (exclusive of any investment income) of $500,000. Primary has 100,000 shares of common stock outstanding. Secondary reports net income of $250,000 for the period with 50,0000 shares of common stock outstanding. Secondary also has 10,000 stock warrants outstanding that allow the holder to acquire the shares at $10 per share. The value of this stock was $20 per share throughout the year. Primary owns 4,000 of these warrants. Calculate Primary’s diluted earnings per share on consolidated financial statements.
Novak Limited owns a 26% interest in the shares of Marigold Corporation. During the year, Marigold pays $10600 in dividends to Novak and reports $104000 net income. Novak's investment in Marigold will increase Novak's net income by $10600. $27040. $2756. $29796. Please give correct option or incorrect all sub part
On January 1, 2020, Kinney, Inc., an S corporation, reports $11,200 of accumulated E & P and a balance of $28,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $14,000. Kinney distributes $16,800 to each shareholder on July 1, and it distributes another $8,400 to each shareholder on December 21. How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Erin and Frank each report $ 0 x dividend income for the July 1 distribution and $ 0 X each for the December 21 distribution. Assuming that the shareholders have sufficient basis in their stock, both Erin and Frank each receive a tax-free ✓ 0 X distribution from AAA.
Oriole Inc. owns shares of Waterway Corporation stock. At December 31, 2025, the securities were carried in Oriole's accounting records at their cost of $997,000, which equals their fair value. On September 21, 2026, when the fair value of the securities was $1,401,000, Oriole declared a property dividend whereby the Waterway securities are to be distributed on October 23, 2026, to stockholders of record on October 8, 2026. Prepare all journal entries necessary on those three dates. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record entries in the order displayed in the problem statement.) Date Account Titles and Explanation Sep. 21 Sep. 21 (To record gain or loss) Oct. 8 (To record property dividend) Oct. 23 Debit Credit
On 1 January 2019, Happy Bhd acquired 75% of the ordinary shares and 30% of thepreference shares of Lucky Bhd. The preference shares are classified as equity andthey carry a cumulative preference dividend of 10% per year. The payment ofdividend is discretionary and conditional on the company achieving sufficient profitsin each year. Dividends on ordinary shares can only be paid after all arrears ofpreference dividends have been paid. For the year ended 31 December 2021, LuckyBhd reported a profit after tax of RM70 million. Its equity consists of the followingcomponents: Cumulative preference shares of 100 million units 100,000Ordinary shares of 200,000 units 200,000Retained profits brought forward 80,000Profit after tax for year ended 2021 70,000Total 450,000 Required:(a) Compute the amount of…
Evan Company reports net income of $183,000 each year and declares an annual cash dividend of $90,000. The company holds net assets of $1,300,000 on January 1, 2020. On that date, Shalina purchases 40 percent of Evan's outstanding common stock for $689,000, which gives it the ability to significantly influence Evan. At the purchase date, the excess of Shalina’s cost over its proportionate share of Evan’s book value was assigned to goodwill. On December 31, 2022, what is the Investment in Evan Company balance (equity method) in Shalina’s financial records? Multiple Choice $908,600. $835,400. $800,600. $872,600.

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