(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 12,000 shares of common stock outstanding at the beginning of 2019. Francis issued 1,500 additional shares on May 1 and 1,000 additional shares on September 30. It also has two convertible securities outstanding at the end of 2019. These are: Convertible preferred stock: 1,250 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2016, for $55 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 $125,000 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 $50,000 during 2019. The income tax rate is 30%. 3. Calculate diluted earnings per share for 2019 and the incremental EPS of the…
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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:
Convertible Preferred Stock, Convertible Bonds, and EPS Francis Company has 19,200 shares of common stock outstanding at the beginning of 2019. Francis issued 2,400 additional shares on May 1 and 1,600 additional shares on September 30. It also has two convertible securities outstanding at the end of 2019. These are: Convertible preferred stock: 2,000 shares of 8.0%, $50 par, preferred stock were issued on January 2, 2016, for $55 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 $200,000 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 $70,000 during 2019. The income tax rate is 30%. Required: 1. Compute the number of shares of common stock that Francis should…
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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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Convertible Preferred Stock, Convertible Bonds, and EPS Francis Company has 12,000 shares of common stock outstanding at the beginning of 2019. Francis issued 1,500 additional shares on May 1 and 1,000 additional shares on September 30. It also has two convertible securities outstanding at the end of 2019. These are: Convertible preferred stock: 1,250 shares of 9.0%, $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 $125,000 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 $55,000 during 2019. The income tax rate is 30%. Required: 1. Compute the number of shares of common stock that Francis should use…
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The table below shows a partial view of Webster Corporation's balancesheet. Webster CorporationBalance Sheet (partial)At December 31, 2021 Long-term debt Notes payable 10% $2,000,00010% convertible bonds payable 2,500,00012% convertible bonds payable 3,000,000Total long-term debt $7,500,000 Stockholders' equity 6% cumulative, convertiblepreferred stock, $100 par, 50,000shares outstanding. 5,000,000 Common stock, $1 par, 600,000shares outstanding. 600,000Additional paid-in capital 2,500,000 Retained earnings 8,500,000Total stockholders' equity $16,600,000 Notes and Assumptions December 31, 20211. Options were granted in December 2020 to purchase 25,000 shares of common stock at $25 per share. The average market price of common stock during 2021 was $35 per share. All options are still outstanding atthe end of 2021 2. Both the 10 percent and 12 percent convertible bonds were issued in2020 at face value. Each convertible bond is convertible into 50 shares of common stock.…

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