During 2018, Angel Corporation had 900,000 shares of commonstock and 50,000 shares of 6% preferred stock outstanding. Thepreferred stock does not have cumulative or convertible features.Angel declared and paid cash dividends of $300,000 and $150,000to common and preferred shareholders, respectively, during 2018.On January 1, 2018, Angel issued $2,000,000 of convertible 5%bonds at face value. Each $1,000 bond is convertible into fivecommon shares.Angel's net income for the year ended December 31, 2018, was $6million. The income tax rate is 20%.What will Angel report as diluted earnings per share for 2018,rounded to the nearest cent?

No. of Shares convertible from bonds = (2,000,000/1,000)*5…

Answered: - preferred stock outs cumulative or…

Business

Accounting

- preferred stock outs cumulative or conver dividends of $300,000 eholders, respectivel-

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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Question

During 2018, Angel Corporation had 900,000 shares of common
stock and 50,000 shares of 6% preferred stock outstanding. The
preferred stock does not have cumulative or convertible features.
Angel declared and paid cash dividends of $300,000 and $150,000
to common and preferred shareholders, respectively, during 2018.
On January 1, 2018, Angel issued $2,000,000 of convertible 5%
bonds at face value. Each $1,000 bond is convertible into five
common shares.
Angel's net income for the year ended December 31, 2018, was $6
million. The income tax rate is 20%.
What will Angel report as diluted earnings per share for 2018,
rounded to the nearest cent?

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