PR 12-1A Effect of financing on earnings per shareThree different plans for financing an $18,000,000 corporation are under consideratioby its organizers. Under each of the following plans, the securities will be issued at theirnar or face amount, and the income tax rate is estimated at 40% of income:Plan 1Plan 2Plan 38% Bonds$ 9,000,000Preferred 4% stock, $20 parCommon stock, $10 par$ 9,000,0009,000,000$18,000,0004,500,000$18,000,000$18,000,0004,500,000$18,000,000TotalInstructions1. Determine the earnings per share of common stock for each plan, assuming that theincome before bond interest and income tax is $2,100,000.2. Determine the earnings per share of common stock for each plan, assuming that theincome before bond interest and income tax is $1,050,000.3.Discuss the advantages and disadvantages of each plan.OBJ. 2, 3

Name: PR 12-1A Effect of financing on earnings per shareThree different pla
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Description: PR 12-1A Effect of financing on earnings per shareThree different plans for financing an $18,000,000 corporation are under consideratioby its organizers. Under each of the following plans, the securities will be issued at theirnar or face amount, an

Earning per share represents the earnings held in hands of stockholders of the company. It is…

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Effect PR 12-1A Three different plans for financing an $18,000. by its organizers. Under each of the following plans, the securities will be E or face amount, and the income tax rate is estimated at 40% of income: Plan 1 Plan 2 Plan 3 8% Bonds $ 9,000,000 4,500,000 ebl noiroo $ 9,000,000 Preferred 4% stock, $20 par Common stock, $10 par $18,000,000 $18,000,000 9,000,000 $18,000,000 4,500,000 $18,000,000 Total na that the

Effect PR 12-1A Three different plans for financing an $18,000. by its organizers. Under each of the following plans, the securities will be E or face amount, and the income tax rate is estimated at 40% of income: Plan 1 Plan 2 Plan 3 8% Bonds $ 9,000,000 4,500,000 ebl noiroo $ 9,000,000 Preferred 4% stock, $20 par Common stock, $10 par $18,000,000 $18,000,000 9,000,000 $18,000,000 4,500,000 $18,000,000 Total na that the

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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lm aldeg alwolk EX 12-1 Effect of financing on earnings per share OBJ. 1 54 Domanico Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 8% (issued at face amount) Preferred $5 stock, $10 par Common stock, $20 par $10,000,000 10,000,000 10,000,000 PLpoug biemo 1000 (llob Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $10,500,000, (b) $11,800,000, and (c) $13,000,000.
EX 14-1 Effect of financing on earnings per share Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 5% (issued at face amount) oliqms Preferred $2.00 stock, $100 par Common stock, $25 par $6,000,000 3,000,000 5,000,000 OBJ. 1 Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $900,000, (b) $1,100,000, and (c) $1,500,000.
Briefly outline the significance of the EPS as a measure of financial performance Outline TWO (2) disclosure and presentation requirements of IAS33 The firm had 10 million common stocks in issue for the year ending December 31 2022. On the 1 January 2023 it had issued $2 million of 6% convertible debentures, each $5.00 of debentures can be converted into four common shares on the 1 of January at the option of the holder of the debenture. The firm had profit after tax for the year ended December 31, 2022, of $1 850 000. The firm pays tax at 30% for the year ended. Required: Calculate the Basic and diluted EPS for the year 2022 Outline the need to disclose a diluted EPS figure and on the relevance of this to the sharehol
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Required information Problem 10-2A Record equity transactions and indicate the effect on the balance sheet equation (LO10-2, 10-3, 10-4, 10-5) Skip to question [The following information applies to the questions displayed below.] Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2021, 350 shares of preferred stock and 4,500 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2021: March 1 Issue 1,600 shares of common stock for $47 per share. May 15 Purchase 450 shares of treasury stock for $40 per share. July 10 Resell 250 shares of treasury stock purchased on May 15 for $45 per share. October 15 Issue 250 shares of preferred stock for $50 per share. December 1 Declare a cash dividend on both common and preferred stock of $1.00 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury…
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Exercise 10-3 (Algo) Recording bond issuance and interest LO P1 On January 1, Boston Enterprises Issues bonds that have a $1,600,000 par value, mature in 20 years, and pay 8% Interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much Interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare Journal entries to record (a) the issuance of bonds on January 1, (b) the first interest payment on June 30, and (c) the second Interest payment on December 31. 3. Prepare the journal entry for Issuance assuming the bonds are issued at (a) 98 and (b) 102. Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much interest will Boston pay (in cash) to the bondholders every six months? Semiannual Cash Interest Payment Par (maturity) Value Required 3 X Semiannual Rate Required 1 Required 2 >
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