Farmer Company had the following share capital as of December 31, 2XX1: Bonds payable, P1,000 face value, 5,000 bonds, 6% interest rate, each bond is convertible into twenty ordinary shares Ordinary share capital, P50 par, 500,000 shares authorized, 200,000 shares outstanding The entity reported a net income of P5,400,000 for the current year. The income tax rate is 30%. Compute 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, 2XX1.. BEDS 5,000,000 10,000,000
Farmer Company had the following share capital as of December 31, 2XX1: Bonds payable, P1,000 face value, 5,000 bonds, 6% interest rate, each bond is convertible into twenty ordinary shares Ordinary share capital, P50 par, 500,000 shares authorized, 200,000 shares outstanding The entity reported a net income of P5,400,000 for the current year. The income tax rate is 30%. Compute 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, 2XX1.. BEDS 5,000,000 10,000,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please avoid images in answers thank you
![Farmer Company had the following share capital as of December 31, 2XX1:
Bonds payable, P1,000 face value, 5,000 bonds, 6% interest rate, each bond is
convertible into twenty ordinary shares
Ordinary share capital, P50 par, 500,000 shares authorized, 200,000 shares outstanding
The entity reported a net income of P5,400,000 for the current year. The income tax rate is 30%.
Compute 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, 2XX1.
BEPS =
DEPS =
5,000,000
10,000,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fccf81b9b-949a-4e4e-a465-f0b3cd57274d%2Fdab66bd9-618c-4a8c-9a1b-5f81a7664216%2Fwap19pa_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Farmer Company had the following share capital as of December 31, 2XX1:
Bonds payable, P1,000 face value, 5,000 bonds, 6% interest rate, each bond is
convertible into twenty ordinary shares
Ordinary share capital, P50 par, 500,000 shares authorized, 200,000 shares outstanding
The entity reported a net income of P5,400,000 for the current year. The income tax rate is 30%.
Compute 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, 2XX1.
BEPS =
DEPS =
5,000,000
10,000,000
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