Hanson Co. had 200,000 ordinary shares, 20,000 shares of convertible preference shares, and €1,000,000 of 10% convertible bondsoutstanding during 2022. The preference shares are convertible into 40,000 ordinary shares. During 2022, Hanson paid dividends of€1.20 per share on the ordinary shares and €4 per share on the preference shares. Each €1,000 bond is convertible into 45 ordinaryshares. The net income for 2022 was €800,000 and the income tax rate was 30%.Diluted earnings per share for 2022 is (rounded to the nearest penny)

1.Calculate the net income available to ordinary shareholders:First, we need to subtract the…

Answered: Hanson Co. had 200,000 ordinary shares,…

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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Arco, Inc. issued $300,000 of 4%, 10-year convertible bonds at par on July 1, 2022. Each bond has a par value of $1000. The bonds include the option for bondholders to convert each bond into 50 $1 par value shares of common stock beginning two years after the date of issue. The market price of the stock at the time of issue is $25 per share and the beneficial conversion option is valued at $75,000. On July 2, 2024, when the market price of the stock is $35 and the balance in the Discount account is $66,000, all of the bondholders convert the bonds. What is the proper entry to record the conversion of the bonds? Group of answer choices Date Account Debit Credit July 2, 2024 Bonds Payable 300,000 Discount on Bonds Payable 75,000 Common Stock, $1 par, 15,000 shares 300,000 Add. Paid-in Capital—Bene. Conv. Option 75,000 Date Account Debit Credit July 2, 2024 Bonds Payable 300,000 Add. Paid-in Capital—Bene. Conv. Option 75,000 Discount…
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PROVIDE COMPUTATION
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Rakesh

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