Francis Company has 12,000 shares of common stock outstanding at the beginning of 2013. 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 2013. These are: Convertible preferred stock: 1,250 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2010, 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 2012. 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 2013. The income tax rate is 30% 1) Calculate basic earnings per share for 2013. If required, round your answer to the nearest cent.. 2). Calculate diluted earnings per share for 2013 and the incremental EPS of the preferred stock and convertible bonds. If required, round your answers to the nearest cent. Diluted earnings per share: xxxxxx 3) Incremental Earning Per share xXxXx a) Bonds XXXXXX b) Preferred XXXXX
Francis Company has 12,000 shares of common stock outstanding at the beginning of 2013. 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 2013. These are: Convertible preferred stock: 1,250 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2010, 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 2012. 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 2013. The income tax rate is 30% 1) Calculate basic earnings per share for 2013. If required, round your answer to the nearest cent.. 2). Calculate diluted earnings per share for 2013 and the incremental EPS of the preferred stock and convertible bonds. If required, round your answers to the nearest cent. Diluted earnings per share: xxxxxx 3) Incremental Earning Per share xXxXx a) Bonds XXXXXX b) Preferred XXXXX
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
Question
Solve
Transcribed Image Text:Francis Company has 12,000 shares of common stock
outstanding at the beginning of 2013. 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 2013. These are:
Convertible preferred stock: 1,250 shares of 8.5%, $50
par, preferred stock were issued on January 2, 2010, 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 2012.
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 2013. The
income tax rate is 30%
1) Calculate basic earnings per share for 2013. If
required, round your answer to the nearest cent..
2). Calculate diluted earnings per share for 2013 and
the incremental EPS of the preferred stock and
convertible bonds. If required, round your answers to
the nearest cent.
Diluted earnings per share: XXXXXX
3) Incremental Earning Per share xxxxx
a) Bonds
XXXXXX
b) Preferred xxxxx
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education