Company X has a June 30th year-end. On 1 July 20X5 company X issued £40 million 10%convertible loan stock at par. The terms of conversion (on 1 July 20X9) are that for every £200 ofloan stock, 40 ordinary shares will be issued at the option of loan stockholders. The income tax is25%. Earnings attributable to ordinary shareholders for the year ended 30th June 20X6 were£32.4m and 60 million ordinary shares in issue. You may assume that the convertible loan stock isdilutive.Calculate company X's diluted EPS for the year ended 30th June 20X6.

To calculate the diluted EPS for the year ended June 30th, 20X6, we need to determine…

Answered: Company X has a June 30th year-end. On…

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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Blair Ltd. owns 100 bonds that can be converted into shares of Mac Ltd. with par value CU500 each bond. The historical cost is CU48,000 at the purchase date of 01/01/20x1. The bonds will mature at the date of 31/12/20x5. The nominal interest rate is 5% annually. The interest will be paid at the end of the period. Blair Ltd. must spend CU1,000 on a brokerage company to acquire this bond. Blair Ltd. intends to hold this investment until the maturity date and applies the accounting standards under IAS/IFRS. Required: (1) Recognize and measure the above bonds on 01/01/20x1 and 31/12/20x1. Assumed that, on December 31, 20x1, Blair Ltd. had no intention of converting bonds into ordinary shares. (2) Blair Ltd’s manager said that it is inappropriate to distinguish between hedging and trading activities for the purpose of reporting financial instruments in general purpose financial statements. Outline the arguments for and against this view.
Wild Cat Corporation has a $1,000,000 debt issue that is convertible into 10,000 prdinary shares Interest expense on the liability component of this convertible bond is $60,000. Net income for the year is $210,000, the weighted average number of ordinary shares outstanding is 100,000 shares, and the tax rate is 40 percent. In this case assumed conversion of the debt into ordinary shares at the beginning of the year. Requirement. a. Calculate Basic EPS b. Calculate Diluted EPS
Har
Company X has a June 30th year-end. On 1 July 20X5 company X issued £40 million 10%convertible loan stock at par. The terms of conversion (on 1 July 20X9) are that for every £200 ofloan stock, 40 ordinary shares will be issued at the option of loan stockholders. The income tax is25%. Earnings attributable to ordinary shareholders for the year ended 30th June 20X6 were£32.4m and 60 million ordinary shares in issue. You may assume that the convertible loan stock isdilutive.Calculate company X’s diluted EPS for the year ended 30th June 20X6
Cnc bso Ine Skysong Inc. issued $3,120,000 of convertible 10-year bonds on July 1, 2020. The bonds provide for 12% merest payable semiannually on January 1 and July 1. The discount in connection with the issue was $49,200, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 8 shares of Skysong Inc.'s $100 par value common stock for each $1,000 of bonds. On August 1, 2021, $312,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (Credit account titles are automatically indented when 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.) (a) (b) (c) : August 1, 2021.…
sa
Kingbird Inc. issued $3,000,000 of convertible 10-year bonds on July 1, 2025. The bonds provide for 11% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $56,400, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 9 shares of Kingbird Inc's $100 par value common stock for each $1,000 of bonds. On August 1, 2026, $300,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the…
At 31 December 2021 Wyndhams calculated its basic earnings per share as 30 pence per share, based on earnings of £900,000 and 3 million £1 ordinary shares. It has a tax rate of 25%. In addition to the ordinary shares, Wyndham has £3m of 4% convertible loan stock. This is convertible any time from 1 January 2021 – 31 December 2022 at a rate of 1 ordinary share for each £5 of loan stock. None had been converted by the year end. a) Calculate the diluted EPS for year ended 31 December 2021. Answer to one decimal place Wyndhams issued £2m 8% convertible preference shares on 1 January 2021, convertible between January 2024 and January 2025 at a rate of 1 ordinary share per £5 of preference shares. b) Combine the information on the convertible loan stock and the convertible preference shares to calculate the diluted EPS for year ended 31 December 2021. Answer to one decimal place
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On January 2, 2014, a calendar-year corporation sold 12% bonds with a face value of $200,000. These bonds mature in six years, and interest is paid semi-annually on June 30 and December 31. The bonds were yield 10%. What was the issue price of the bond? a. $217,726.50 b. $183,232.31 c. $200,000.00 d. $344,000.00 e. None of the above
On I January x1, Annie Bhd issued 25 million, 4% redeemable preference shares at RMl each redeemable at a premium of 18%, on 31 December x4. The effective interest rate is 8% and the interest rate is 31 December. The market price of the shares in years x1 to x4 is shown below: RM 31 December xl 31 December x2 1.06 1.10 31 December x3 112 31 December x4 118 Required: Discuss the accounting treatment where the preference shares are measured at amortised cost

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