On June 1, 2018, Larkspur Company and Cullumber Company merged to form Riverbed Inc. A total of 870,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 543,000 shares of stock for cash. All 1,413,000 shares were outstanding on December 31, 2020. Riverbed Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 38 shares of common at any interest date. None of the bonds have been converted to date. Riverbed Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,613,000. (The tax rate is 20%.) Determine the following for 2020. (a) The number of shares to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.) (1) Basic earnings per share enter a number of shares rounded to 0 decimal places shares (2) Diluted earnings per share enter a number of shares rounded to 0 decimal places shares (b) The earnings figures to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.) (1) Basic earnings per share $enter a dollar amount rounded to 0 decimal places (2) Diluted earnings per share $enter a dollar amount rounded to 0 decimal places
On June 1, 2018, Larkspur Company and Cullumber Company merged to form Riverbed Inc. A total of 870,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 543,000 shares of stock for cash. All 1,413,000 shares were outstanding on December 31, 2020. Riverbed Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 38 shares of common at any interest date. None of the bonds have been converted to date. Riverbed Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,613,000. (The tax rate is 20%.) Determine the following for 2020. (a) The number of shares to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.) (1) Basic earnings per share enter a number of shares rounded to 0 decimal places shares (2) Diluted earnings per share enter a number of shares rounded to 0 decimal places shares (b) The earnings figures to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.) (1) Basic earnings per share $enter a dollar amount rounded to 0 decimal places (2) Diluted earnings per share $enter a dollar amount rounded to 0 decimal places
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On June 1, 2018, Larkspur Company and Cullumber Company merged to form Riverbed Inc. A total of 870,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis.
On April 1, 2020, the company issued an additional 543,000 shares of stock for cash. All 1,413,000 shares were outstanding on December 31, 2020.
Riverbed Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 38 shares of common at any interest date. None of the bonds have been converted to date.
Riverbed Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,613,000. (The tax rate is 20%.)
Determine the following for 2020.
(a) The number of shares to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.)
| (1) |
Basic earnings per share
|
enter a number of shares rounded to 0 decimal places
|
shares | |||
|---|---|---|---|---|---|---|
| (2) |
Diluted earnings per share
|
enter a number of shares rounded to 0 decimal places
|
shares |
(b) The earnings figures to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.)
| (1) |
Basic earnings per share
|
$enter a dollar amount rounded to 0 decimal places
|
||
|---|---|---|---|---|
| (2) |
Diluted earnings per share
|
$enter a dollar amount rounded to 0 decimal places
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
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