Darren corp has the following details for one of its subsidiaries: Long-term debt: 9% payable for notes = $1,018,000 convertible bonds payable at 7% -5,048,000 Bonds payable at 9% -6,026,000 Total long-term debt-$12,092,000 Shareholders' equity: Preferred stock, 6% cumulative, $57 par value, 106,300 shares authorized, 26,575 shares issued and outstanding-$1,514,775 Common stock, $1 par, 10,075,000 shares authorized, 1,007,500 shares issued and outstanding 1,007,500 Additional paid-in capital=4,001,800 Retained earnings=6,018,900 Total shareholders' equity-$12,542,975 Options were granted on July 1, 2013, to purchase 203,700 shares at $18 per share. Although no options were exercised during fiscal year 2014, the average price per common share during fiscal year 2014 was $20 per share.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Darren corp has the following details for one of its subsidiaries:
Long-term debt:
9% payable for notes =$1,018,000
convertible bonds payable at 7% -5,048,000
Bonds payable at 9% -6,026,000
Total long-term debt-$12,092,000
Shareholders' equity:
Preferred stock, 6% cumulative, $57 par value, 106,300 shares authorized, 26,575 shares issued and
outstanding $1,514,775
Common stock, $1 par, 10,075,000 shares authorized, 1,007,500 shares issued and outstanding=1,007,500
Additional paid-in capital=4,001,800
Retained earnings=6,018,900|
Total shareholders' equity=$12,542,975
Options were granted on July 1, 2013, to purchase 203,700 shares at $18 per share. Although no options were
exercised during fiscal year 2014, the average price per common share during fiscal year 2014 was $20 per share.
Each bond was issued at face value. The 7% convertible bonds will convert into common stock at 57 shares per
$1,000 bond. The bonds are exercisable after 5 years and were issued in fiscal year 2013.
The preferred stock was issued in 2013.
There are no preferred dividends in arrears; however, preferred dividends were not declared in fiscal year 2014.
The 1,007,500 shares of common stock were outstanding for the entire 2014 fiscal year.
Net income for fiscal year 2014 was $1,547,000, and the average income tax rate is 45%. preparing the calculation
for basic and diluted earnings per share.
Transcribed Image Text:Darren corp has the following details for one of its subsidiaries: Long-term debt: 9% payable for notes =$1,018,000 convertible bonds payable at 7% -5,048,000 Bonds payable at 9% -6,026,000 Total long-term debt-$12,092,000 Shareholders' equity: Preferred stock, 6% cumulative, $57 par value, 106,300 shares authorized, 26,575 shares issued and outstanding $1,514,775 Common stock, $1 par, 10,075,000 shares authorized, 1,007,500 shares issued and outstanding=1,007,500 Additional paid-in capital=4,001,800 Retained earnings=6,018,900| Total shareholders' equity=$12,542,975 Options were granted on July 1, 2013, to purchase 203,700 shares at $18 per share. Although no options were exercised during fiscal year 2014, the average price per common share during fiscal year 2014 was $20 per share. Each bond was issued at face value. The 7% convertible bonds will convert into common stock at 57 shares per $1,000 bond. The bonds are exercisable after 5 years and were issued in fiscal year 2013. The preferred stock was issued in 2013. There are no preferred dividends in arrears; however, preferred dividends were not declared in fiscal year 2014. The 1,007,500 shares of common stock were outstanding for the entire 2014 fiscal year. Net income for fiscal year 2014 was $1,547,000, and the average income tax rate is 45%. preparing the calculation for basic and diluted earnings per share.
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