Problem: Happy realized income of P97.000 before interest and income taxes, with Assets of -„P517.000 Liabilities 220,000 SE 297,000 os 10,000 (Par value P100) Income Tax Rate 32% he corporation want to have additional capital of 2300.000 in order to add its operating incom y P150.000 Two options are presented 1) Obtain P300.000 loan having interest of 30%. 2) Additional of 1270 shares of capital stocks with market price of P 1200 Compute: both options 1) Net Income 2) Earnings per share 3) Rate of return on Owner's Equity 4) Which option is advantageous to Happy Corporation?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Problem:
Happy realized income of P97.000 before interest and income taxes, with
Assets of
..P517.000
Liabilities
220,000
SE
297,000
os
Income Tax Rate 32%
he corporation want to have additional capital of P300.000 in order to add its operating incom
y P150.000. Two options are presented:
1) Obtain P300.000 loan having interest of 30%.
2) Additional of 1270 shares of capital stocks with market price of P 1200
10,000 (Par value P100)
Compute: both options
1) Net Income
2) Earnings per share
3) Rate of return on Owner's Equity
4) Which option is advantageous to Happy Corporation?
Transcribed Image Text:Problem: Happy realized income of P97.000 before interest and income taxes, with Assets of ..P517.000 Liabilities 220,000 SE 297,000 os Income Tax Rate 32% he corporation want to have additional capital of P300.000 in order to add its operating incom y P150.000. Two options are presented: 1) Obtain P300.000 loan having interest of 30%. 2) Additional of 1270 shares of capital stocks with market price of P 1200 10,000 (Par value P100) Compute: both options 1) Net Income 2) Earnings per share 3) Rate of return on Owner's Equity 4) Which option is advantageous to Happy Corporation?
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