Homework Help is Here – Start Your Trial Now!
Business
Accounting
QUESTION TWO IFA Corporations had Net Incorme of $780,000 and the following information for January 2021 to December 2021. Ordinary shares issued and outstanding: Jan 1 500,000 shares March 1 300,000 shares. June 1 A 10% share dividend August 1 120,000 shares. October 1 700,000 shares. December 1 A2 for 1 share split On January 1, 10% convertible debentures, $60,000,000 face value, were issued at par. Each $1,000 debenture is convertible into 40 ordinary shares. The interest expense for the current year related to the liability component of the convertible debentures is $6,500,000. 250,000 preference shares outstanding, $60 par, 10% cumulative, not convertible. Options were granted to purchase 400,000 ordinary shares at $18 each. The company's average market price of ordinary shares was $24. 10-year $3,000,000 face value, 8% bonds issued at par on May 1. Each $500 bond is convertible

QUESTION TWO IFA Corporations had Net Incorme of $780,000 and the following information for January 2021 to December 2021. Ordinary shares issued and outstanding: Jan 1 500,000 shares March 1 300,000 shares. June 1 A 10% share dividend August 1 120,000 shares. October 1 700,000 shares. December 1 A2 for 1 share split On January 1, 10% convertible debentures, $60,000,000 face value, were issued at par. Each $1,000 debenture is convertible into 40 ordinary shares. The interest expense for the current year related to the liability component of the convertible debentures is $6,500,000. 250,000 preference shares outstanding, $60 par, 10% cumulative, not convertible. Options were granted to purchase 400,000 ordinary shares at $18 each. The company's average market price of ordinary shares was $24. 10-year $3,000,000 face value, 8% bonds issued at par on May 1. Each $500 bond is convertible

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Please do last part d

QUESTION TWO IFA Corporations had Net Incorne of $780,000 and the following information for January 2021 to December 2021. Ordinary shares issued and outstanding: Jan 1 500,000 shares March 1 300,000 shares. June 1 A 10% share dividend August 1 120,000 shares. October 1 700,000 shares. December 1 A2 for 1 share split On January 1, 10% convertible debentures, $60,000,000 face value, were issued at par. Each $1,000 debenture is convertible into 40 ordinary shares. The interest expense for the current year related to the liability component of the convertible debentures is $6,500,000. 250,000 preference shares outstanding, $60 par, 10% cumulative, not convertible. Options were granted to purchase 400,000 ordinary shares at $18 each. The company's average market price of ordinary shares was $24. 10-year $3,000,000 face value, 8% bonds issued at par on May 1. Each $500 bond is convertible
Transcribed Image Text:QUESTION TWO IFA Corporations had Net Incorne of $780,000 and the following information for January 2021 to December 2021. Ordinary shares issued and outstanding: Jan 1 500,000 shares March 1 300,000 shares. June 1 A 10% share dividend August 1 120,000 shares. October 1 700,000 shares. December 1 A2 for 1 share split On January 1, 10% convertible debentures, $60,000,000 face value, were issued at par. Each $1,000 debenture is convertible into 40 ordinary shares. The interest expense for the current year related to the liability component of the convertible debentures is $6,500,000. 250,000 preference shares outstanding, $60 par, 10% cumulative, not convertible. Options were granted to purchase 400,000 ordinary shares at $18 each. The company's average market price of ordinary shares was $24. 10-year $3,000,000 face value, 8% bonds issued at par on May 1. Each $500 bond is convertible
into 30 ordinary shares. The interest expense on the liability component of convertible bonds for the year was $360,000 The tax rate was 30%. Requirements: (a) Calculate the weighted average shares (to the nearest whole number) at December 31, 2021 (b) Calculate the basic earnings per share for 2021 (c) Calculate the diluted earnings per share for 2021. (d) Explain and justify the accounting treatment for share dividends and share splits.
Transcribed Image Text:into 30 ordinary shares. The interest expense on the liability component of convertible bonds for the year was $360,000 The tax rate was 30%. Requirements: (a) Calculate the weighted average shares (to the nearest whole number) at December 31, 2021 (b) Calculate the basic earnings per share for 2021 (c) Calculate the diluted earnings per share for 2021. (d) Explain and justify the accounting treatment for share dividends and share splits.
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Risk and Return
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
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS