Share premium-ordinary (includes any amounts for options and conversions) Retained earnings Total equity Long-term debt Notes payable, 10% 4,000,000 6,000,000 €12,250,000 Convertible bonds payable 10% bonds payable Total long-term debt The following transactions have also occurred at Fitzgerald. 1. Options were granted on July 1, 2021, to purchase 200,000 shares at €15 per share. Although no options were exercised during fiscal year 2022, the average price per ordinary share during fiscal year 2022 was €20 per share. € 1,000,000 5,000,000 6,000,000 €12,000,000 2. Each bond was issued at face value. The convertible bonds will convert into ordinary shares at 50 shares per €1,000 bond. The conversion is exercisable after 5 years, and the bonds were issued in 2020. The interest on the liability component of the convertible bonds payable for the fiscal year ending June 30, 2022, was €450,000. 3. The preference shares were issued in 2020. Instructions For the fiscal year ended June 30, 2022, calculate the following for Fitzgerald Pharmaceutical Industries. 4. There are no preference dividends in arrears; however, preference dividends were not declared in fiscal year 2022. 5. The 1,000,000 ordinary shares were outstanding for the entire 2022 fiscal year. 6. Net income for fiscal year 2022 was €1,500,000, and the average income tax rate is 40%. a. Basic earnings per share. b. Diluted earnings per share.
Share premium-ordinary (includes any amounts for options and conversions) Retained earnings Total equity Long-term debt Notes payable, 10% 4,000,000 6,000,000 €12,250,000 Convertible bonds payable 10% bonds payable Total long-term debt The following transactions have also occurred at Fitzgerald. 1. Options were granted on July 1, 2021, to purchase 200,000 shares at €15 per share. Although no options were exercised during fiscal year 2022, the average price per ordinary share during fiscal year 2022 was €20 per share. € 1,000,000 5,000,000 6,000,000 €12,000,000 2. Each bond was issued at face value. The convertible bonds will convert into ordinary shares at 50 shares per €1,000 bond. The conversion is exercisable after 5 years, and the bonds were issued in 2020. The interest on the liability component of the convertible bonds payable for the fiscal year ending June 30, 2022, was €450,000. 3. The preference shares were issued in 2020. Instructions For the fiscal year ended June 30, 2022, calculate the following for Fitzgerald Pharmaceutical Industries. 4. There are no preference dividends in arrears; however, preference dividends were not declared in fiscal year 2022. 5. The 1,000,000 ordinary shares were outstanding for the entire 2022 fiscal year. 6. Net income for fiscal year 2022 was €1,500,000, and the average income tax rate is 40%. a. Basic earnings per share. b. Diluted earnings per share.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:now employee share-purchase plans are rec
P16.4 (LO 4, 5, 7) Groupwork (EPS with Complex Capital Structure) Amy Dyken,
controller at Fitzgerald Pharmaceutical Industries, a public company, is currently preparing
the calculation for basic and diluted earnings per share and the related disclosure for
Fitzgerald's financial statements. Selected financial information for the fiscal year ended
June 30, 2022, is shown below.
Fitzgerald Pharmaceutical Industries
Selected Statement of Financial Position Information
June 30, 2022
Equity
Share capital-preference, 6% cumulative, €50 par value, 100,000 shares
authorized, 25,000 shares issued and outstanding
Share capital-ordinary, €1 par, 10,000,000 shares authorized, 1,000,000
shares issued and outstanding
Share premium-ordinary (includes any amounts for options and
conversions)
Retained earnings
Total equity
Long-term debt
Notes payable, 10%
Convertible bonds payable
10% bonds payable
€ 1,250,000
1,000,000
4,000,000
6,000,000
€12,250,000
Total long-term debt
The following transactions have also occurred at Fitzgerald.
1. Options were granted on July 1, 2021, to purchase 200,000 shares at €15 per share.
Although no options were exercised during fiscal year 2022, the average price per
ordinary share during fiscal year 2022 was €20 per share.
€ 1,000,000
5,000,000
6,000,000
€12,000,000
2. Each bond was issued at face value. The convertible bonds will convert into ordinary
shares at 50 shares per €1,000 bond. The conversion is exercisable after 5 years, and
Instructions
For the fiscal year ended June 30, 2022, calculate the following for Fitzgerald
Pharmaceutical Industries.
the bonds were issued in 2020. The interest on the liability component of the
convertible bonds payable for the fiscal year ending June 30, 2022, was €450,000.
3. The preference shares were issued in 2020.
a. Basic earnings per share.
b. Diluted earnings per share.
4. There are no preference dividends in arrears; however, preference dividends were not
declared in fiscal year 2022.
5. The 1,000,000 ordinary shares were outstanding for the entire 2022 fiscal year.
6. Net income for fiscal year 2022 was €1,500,000, and the average income tax rate is
40%.
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