Computing EPS: Convertible DebtShaffer Corporation issued 100, $1,000, 10% convertible bonds in 2019 at face value. Each bond is convertible into 100 shares of common stock. Shaffer's net income for2020 is $1,824,000 ($2,432,000 before tax). Considering all factors except convertible bonds, average common shares outstanding for 2020 were 1,010,000.• Note: In the following calculations, enter the earnings per share amounts in dollars and cents, rounded to the nearest penny.a. Compute basic EPS.b. Compute diluted EPS.Net Income Available to Weighted Avg. CommonCommon StockholdersShares OutstandingPerShare1.8 *Basic EPS $1,822,125 *1,012,500 $1,020,000 $Diluted EPS $1,827,750 *1.8c. How do the answers to parts a and b change if the bonds were issued on July 1, 2020?PerShareNet Income Available to Weighted Avg. CommonCommon Stockholders Shares Outstanding$0 x0 xBasic EPS0 x0 x $0 x $Diluted EPS $0 xd. Ignoring part c, how do the answers to parts a and b changeone-half of the bonds were converted on July 1, 2020?Hint: For this exercise, assume that the net income given needs to be adjusted to reflect six months of interest expense instead of one year of interest expense.Net Income Available to Weighted Avg. CommonPerCommon StockholdersShareShares Outstanding1,012,500Basic EPS $1,822,125 *Diluted EPS $1,827,750 *1,020,0001.81.8→→

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Shaffer Corporation issued 100, $1,000, 10% convertible bonds in 2019 at face value. Each bond is convertible into 100 shares of common stock. Shaffer's net income for 2020 is $1,824,000 ($2,432,000 before tax). Considering all factors except convertible bonds, average common shares outstanding for 2020 were 1,010,000. • Note: In the following calculations, enter the earnings per share amounts in dollars and cents, rounded to the nearest penny. a. Compute basic EPS. b. Compute diluted EPS. Net Income Available to Common Stockholders 1,822,125 x Weighted Avg. Common Shares Outstanding Per Share Basic EPS 1,012,500 x $ 1,020,000 $ 1.8 x 1.8 ✔ Diluted EPS $ 1,827,750 x c. How do the answers to parts a and b change if the bonds were issued on July 1, 2020? Net Income Available to Weighted Avg. Common Common Stockholders Shares Outstanding Per Share Basic EPS $ 0x 0x 0 x $ 0 x $ 0x 0 x Diluted EPS $ d Ignoring part c how do the answers to parts and behange if one half of the honde converted on July 1 20202

Shaffer Corporation issued 100, $1,000, 10% convertible bonds in 2019 at face value. Each bond is convertible into 100 shares of common stock. Shaffer's net income for 2020 is $1,824,000 ($2,432,000 before tax). Considering all factors except convertible bonds, average common shares outstanding for 2020 were 1,010,000. • Note: In the following calculations, enter the earnings per share amounts in dollars and cents, rounded to the nearest penny. a. Compute basic EPS. b. Compute diluted EPS. Net Income Available to Common Stockholders 1,822,125 x Weighted Avg. Common Shares Outstanding Per Share Basic EPS 1,012,500 x $ 1,020,000 $ 1.8 x 1.8 ✔ Diluted EPS $ 1,827,750 x c. How do the answers to parts a and b change if the bonds were issued on July 1, 2020? Net Income Available to Weighted Avg. Common Common Stockholders Shares Outstanding Per Share Basic EPS $ 0x 0x 0 x $ 0 x $ 0x 0 x Diluted EPS $ d Ignoring part c how do the answers to parts and behange if one half of the honde converted on July 1 20202

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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am.101.
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Problem: Earnings per Share. (Pls help and provide supporting computations)