It is December 20X1. On May 1, 20X1, the 10% debentures with a principal amount of $400,000 were converted into 12,000 shares. What adjustments are required to the numerator and denominator in calculating the dilutive effect on the EPS if the company pays taxes at 30 % ? Multiple Choice On numerator add back interest of $9,333 and denominator add 4,000 shares. On numerator add back interest of $40,000 and denominator add 12,000 shares. On numerator add back interest of $28,000 and denominator add 6,000 shares On numerator add back interest of S 13, 333 and denominator add 12,000 shares Please provide an explanation of the correct answer
It is December 20X1. On May 1, 20X1, the 10% debentures with a principal amount of $400,000 were converted into 12,000 shares. What adjustments are required to the numerator and denominator in calculating the dilutive effect on the EPS if the company pays taxes at 30 % ? Multiple Choice On numerator add back interest of $9,333 and denominator add 4,000 shares. On numerator add back interest of $40,000 and denominator add 12,000 shares. On numerator add back interest of $28,000 and denominator add 6,000 shares On numerator add back interest of S 13, 333 and denominator add 12,000 shares Please provide an explanation of the correct answer
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:It is December 20X1. On May 1, 20X1, the 10% debentures with a principal amount of $400,000 were converted into
12,000 shares. What adjustments are required to the numerator and denominator in calculating the dilutive effect on
the EPS if the company pays taxes at 30% ? Multiple Choice On numerator add back interest of $9,333 and
denominator add 4,000 shares. On numerator add back interest of $40,000 and denominator add 12,000 shares. On
numerator add back interest of $28,000 and denominator add 6,000 shares on numerator add back interest of $
13,333 and denominator add 12,000 shares Please provide an explanation of the correct answer
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