P15.8B (LO 5) (Computation of Basic and Diluted EPS) The information below pertains to Payson Company for 2026. Net income for the year 6% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2026 $8,670,000 Instructions a. Compute basic earnings per share for 2026. b. Compute diluted earnings per share for 2026. 5,000,000 2,500,000 9,500,000 20% Average market price of common stock $18 per share There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 120,000 shares of common stock at $12 per share.

P15.8B (LO 5) (Computation of Basic and Diluted EPS) The information below pertains to Payson Company for 2026. Net income for the year 6% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2026 $8,670,000 Instructions a. Compute basic earnings per share for 2026. b. Compute diluted earnings per share for 2026. 5,000,000 2,500,000 9,500,000 20% Average market price of common stock $18 per share There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 120,000 shares of common stock at $12 per share.

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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The table below shows a partial view of Webster Corporation's balancesheet. Webster CorporationBalance Sheet (partial)At December 31, 2021 Long-term debt Notes payable 10% $2,000,00010% convertible bonds payable 2,500,00012% convertible bonds payable 3,000,000Total long-term debt $7,500,000 Stockholders' equity 6% cumulative, convertiblepreferred stock, $100 par, 50,000shares outstanding. 5,000,000 Common stock, $1 par, 600,000shares outstanding. 600,000Additional paid-in capital 2,500,000 Retained earnings 8,500,000Total stockholders' equity $16,600,000 Notes and Assumptions December 31, 20211. Options were granted in December 2020 to purchase 25,000 shares of common stock at $25 per share. The average market price of common stock during 2021 was $35 per share. All options are still outstanding atthe end of 2021 2. Both the 10 percent and 12 percent convertible bonds were issued in2020 at face value. Each convertible bond is convertible into 50 shares of common stock.…
P16.1 (LO 1) (Debt Securities) Presented below is an amortization schedule related to Spangler Company's 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2023, for $108,660. Date Cash Received 12/31/23 12/31/24 $7,000 12/31/25 7,000 12/31/26 7,000 12/31/27 12/31/28 7,000 7,000 Interest Revenue $5,433 5,354 5,272 5,186 5,095 Bond Premium Amortization The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. Instructions Amortized cost Fair value 12/31/24 $107,093 106,500 12/31/25 $105,447 107,500 $1,567 1,646 1,728 1,814 1,905 Carrying Amount of Bonds $108,660 107,093 105,447 103,719 101,905 100,000 12/31/26 $103,719 105,650 12/31/27 $101,905 103,000 a. Prepare the journal entry to record the purchase of these bonds on December 31, 2023, assuming the bonds are classified as held-to-maturity securities. b. Prepare the journal entry (entries) related to the held-to-maturity bonds for 2024. c. Prepare…
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Problem: Earnings per Share. (Pls help and provide supporting computations)
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