In 2022, Sheridan Ltd. issued $53,000 of 8% bonds at par, with each $1,000 bond being convertible into 100 common shares. The company had revenues of $76,200 and expenses of $36,300 for 2023, not including interest and tax. (Assume a tax rate of 25%) Throughout 2023, 1,000 common shares were outstanding, and none of the bonds were converted or redeemed. (For simplicity, assume that the convertible bonds' equity element is not recorded.)Assume that 11 of the 53 bonds were converted on July 1, 2023. Calculate diluted earnings per share for the year ended December 31, 2023. (Round answer to 2 decimal places, e.g. 15.25.)
In 2022, Sheridan Ltd. issued $53,000 of 8% bonds at par, with each $1,000 bond being convertible into 100 common shares. The company had revenues of $76,200 and expenses of $36,300 for 2023, not including interest and tax. (Assume a tax rate of 25%) Throughout 2023, 1,000 common shares were outstanding, and none of the bonds were converted or redeemed. (For simplicity, assume that the convertible bonds' equity element is not recorded.)Assume that 11 of the 53 bonds were converted on July 1, 2023. Calculate diluted earnings per share for the year ended December 31, 2023. (Round answer to 2 decimal places, e.g. 15.25.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In 2022, Sheridan Ltd. issued $53,000 of 8% bonds at par, with each $1,000 bond being convertible into 100 common shares. The company had revenues of $76,200 and expenses of $36,300 for 2023, not including interest and tax. (Assume a tax rate of 25%) Throughout 2023, 1,000 common shares were outstanding, and none of the bonds were converted or redeemed. (For simplicity, assume that the convertible bonds' equity element is not recorded.)Assume that 11 of the 53 bonds were converted on July 1, 2023. Calculate diluted earnings per share for the year ended December 31, 2023. (Round answer to 2 decimal places, e.g. 15.25.)
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