Farmer Company had the following share capital as of December 31, 2021: Bonds payable, P1,000 face value, 5,000 bonds, 6% interest rate, each bonds are convertible into twenty ordinary shares Ordinary share capital, P50 par, 500,000 shares authorized, 200,000 shares outstanding 5,000,000 10,000,000 The entity reported a net income of P5,400,000 for the current year. The income tax rate is 30%. Compute for the basic and diluted earnings per share based on the following independent scenarios: A. The bonds were issued in the prior year at par value. BEPS = DEPS = B. The bonds were issued on July 1, 2021. BEPS = DEPS =

Farmer Company had the following share capital as of December 31, 2021: Bonds payable, P1,000 face value, 5,000 bonds, 6% interest rate, each bonds are convertible into twenty ordinary shares Ordinary share capital, P50 par, 500,000 shares authorized, 200,000 shares outstanding 5,000,000 10,000,000 The entity reported a net income of P5,400,000 for the current year. The income tax rate is 30%. Compute for the basic and diluted earnings per share based on the following independent scenarios: A. The bonds were issued in the prior year at par value. BEPS = DEPS = B. The bonds were issued on July 1, 2021. BEPS = DEPS =

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On 31 March 2021 a company has the following capital structure in the capital employed section of its statement of financial position. 50 000 Ordinary shares of $5= $250 000, Share premium 150 000, Retained income 1 500 000, 15 % Preference shares of $8= $200 000, 18% Debentures 600 000, In addition the company plans to use an average of $300 000 in bank overdraft with cost of 12%. The company`s tax rate is 30% and the return expected by ordinary dividends is 20%. Calculate the company`s weighted average cost of capital
The information below pertains to Coronado Company for 2021. Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2021 Average market price of common stock Basic earnings per share $ $1,160,000 There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 82,100 shares of common stock at $20 per share. (a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $ 2,010,000 4,080,000 5,800,000 20% $25 per share (b) Compute diluted earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.)
On January 1, 2020, a company issued 10-year, $330,000 face value, 7% bonds, at par. Each $1,000 bond is convertible into 11 shares of common stock. The company’s net income in the year was $460,000, and its tax rate was 24%. The company had 100,000 shares of common stock outstanding throughout 2020. What is the numerator for computing diluted earnings per share for 2020?
On January 1, 2020, Ayayai Company issued 10-year, $2,140,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 14 shares of Ayayai common stock. Ayayai’s net income in 2020 was $482,300, and its tax rate was 20%. The company had 91,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $enter diluted earnings per share rounded to 2 decimal places (b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $910,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Ayayai common stock. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $enter diluted earnings per share rounded to 2 decimal places
please find basic earnings per share and diluted earnings per share
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
Lilac Company has 200,000 shares of ordinary shares outstanding on January 1, 2021. On March 31, 2021, 100,000 additional ordinary shares. On June 30, the company issued 10%, 100,000 convertible preference share par value of P20. The preference shares are convertible into 200,000 shares of ordinary shares. On December 31, 2021, Lilac Company reported a net income of P1,140,000 after tax and paid dividends of P300,000 to ordinary and P100,000 to preference shareholders. What is the diluted earnings per share? Group of answer choices 3.42 3.51 3.24 3.04
Carla Vista Corporation had net income of $42,000 for the year ended December 31, 2023, and weighted average number of common shares outstanding of 10,000. The following information is provided regarding the capital structure: 1. 2. (a1) (a2) 8% convertible debt, 210 bonds each convertible into 43 common shares. The bonds were outstanding for the entire year. The income tax rate is 35%. The bonds were issued at par ($1,150 per bond). No bonds were converted during the year. 3% convertible, cumulative $100 preferred shares, 1,000 shares issued and outstanding. Each preferred share is convertible into 2 common shares. The preferred shares were issued at par and were outstanding the entire year. No shares were converted during the year. Calculate the basic earnings per share for 2023. (Round answer to 2 decimal places, e.g. 15.25.) Basic earnings per share eTextbook and Media
Part of the Financial Position of Candy Inc. as of Dec. 31, 2019 shows the following: Accounts Payable Bonds payable Ordinary Share Capital par) 8% Preference Share Capital (P200 par) 10% Preference Share Capital(P200 par) Р 56,000 500,000 550,000 (P100 300,000 200,000 25,000 50,000 70,000 230,000 (21,000) P 1,960,000 Share Premium – ordinary Share Premium – Preference Appropriations reserve Accumulated Profits Treasury shares - ordinary (P105/sh) Total Equities Dividends are in arrears for two years. The 10% preference share capital is cumulative while the 8% preference share capital is participating up to 12%. If Candy Inc. is liquidated, how much would be received by Mr. Gwapo who holds 500 ordinary shares and 100 shares of 10% preference shares?
Rancho Cucamonga, Inc. presents the following excerpts from its December 31, 2020 balance sheet: Long-Term Liabilities: Note payable, 8% $200,000 Bonds payable, 10% 1,000,000 Shareholders’ Equity Common stock, par 50,000 Additional paid-in-capital, common stock 350,000 Total contributed capital 400,000 Retained earnings 250,000 Total shareholders’ equity 650,000 The accounting department also conveys the following information: Risk-free rate of return - 3% Risk premium - 4.05% Tax rate – 30% Requirement: Compute Rancho Cucamonga’s weighted average cost of capital.
Im, Incorporated had 52,000 shares of common stock outstanding at January 1, 2024. On March 31, 2024, an additional 12,400 shares were sold for cash, Im also had $4,200,000 of 6% convertible bonds outstanding throughout the year. The bonds are convertible into 42,000 shares of common stock. Net income for the year was $353,000. The tax rate is 25%. Required: Compute basic and diluted earnings per share for the year ended December 31, 2024. Note: Round your answers to 2 decimal places. Basic Diluted $ $ 5.76 5.25
At year-end, Gaze Company had 100,000 ordinary shares and 20,000 convertible preference shares outstanding in addítion tó 10% convertible bonds payable in the face amount of P2,000,000. During the current year, the entity paid dividends of P5 per share on the preference share, The preference share is convertible into 40,000 ordinary shares. The 9% ,bonds are convertible into 30,000 ordinary 'shares. The net income for the current year was P2,410,000 and the income tax rate is 30%. Required: 1. Basic earnings per share 2. Diluted earnings per share