Convertible Preferred Stock, Convertible Bonds, and EPSFrancis Company has 24,000 shares of common stock outstanding at the beginning of 2016. Francis issued 3,000 additional shares on May 1 and 2,000 additional shares on September 30. It also has two convertible securities outstanding at the end of 2016. These are: Convertible preferred stock: 2,500 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2013, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted.Convertible bonds: Bonds with a face value of $250,000 and an interest rate of 5.5% were issued at par in 2015. Each $1,000 bond is convertible into 20 shares of common stock. To date, no bonds have been converted.Francis earned net income of $72,500 during 2016. The income tax rate is 30%.4b. Show how the basic EPS you calculated should be reported to shareholders. You do not have to calculate diluted EPS.Francis CompanyEPS ComputationsEPS Based on:Income from continuing operations $Loss from discontinued operations Net income $

1 Weighted average number of outstanding common shares $ $ shares at the…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Convertible Preferred Stock, Convertible Bonds, and EPS

Francis Company has 24,000 shares of common stock outstanding at the beginning of 2016. Francis issued 3,000 additional shares on May 1 and 2,000 additional shares on September 30. It also has two convertible securities outstanding at the end of 2016. These are:

Convertible preferred stock: 2,500 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2013, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted.
Convertible bonds: Bonds with a face value of $250,000 and an interest rate of 5.5% were issued at par in 2015. Each $1,000 bond is convertible into 20 shares of common stock. To date, no bonds have been converted.

Francis earned net income of $72,500 during 2016. The income tax rate is 30%.

4b. Show how the basic EPS you calculated should be reported to shareholders. You do not have to calculate diluted EPS.

Francis Company
EPS Computations
EPS Based on:
Income from continuing operations	$
Loss from discontinued operations
Net income	$

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