(b)Calculate basic earnings per share. (Round answer to 2 decimal places, e.g. 15.25.)Basic EPS $ Following is information taken from Blossom Inc's December 31, 2023 SFP:5% bonds payable, $5,681,000 maturing December 31, 2025,each $1,000 bond convertible into 19 common shares8% bonds payable, $5,005,000, maturing December 31, 2026,each $1,000 bond convertible into 29 common shares at any time up to December 31, 2026Cumulative preferred shares, $5, no-par value, convertible at1 preferred share for 4 common shares, 52,000 shares outstandingCommon shares, no par-value, 3,179,000 shares outstanding$5,681,000$5,005,000$1,040,000Blossom's net income for 2023 was $8,599,800, and the company was subject to an income tax rate of 20%. Both classes of bondswere outstanding the entire year, as were the preferred shares. The weighted-average number of common shares outstanding duringthe period was 3,626,000.

Basic EPS is the earnings per share of the common shareholders of the entity. It is determined after…

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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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Convertible Preferred Stock, Convertible Bonds, and EPS Francis Company has 21,600 shares of common stock outstanding at the beginning of 2019. Francis issued 2,700 additional shares on May 1 and 1,800 additional shares on September 30. It also has two convertible securities outstanding at the end of 2019. These are: Convertible preferred stock: 2,250 shares of 8.0%, $50 par, preferred stock were issued on January 2, 2016, 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 $225,000 and an interest rate of 6.0% were issued at par in 2018. Each $1,000 bond is convertible into 25 shares of common stock. To date, no bonds have been converted. Francis earned net income of $75,000 during 2019. The income tax rate is 30%. Required:
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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 2019. 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 2019. These are: Convertible preferred stock: 2,500 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2016, 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 2018. 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 2019. The income tax rate is 30%. Required: a. Assume the same facts as above except that net income included a loss…
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