shares Ashante Sports Collections Ltd. (ASCL) ended 20X5 with 985,000 common shares outstanding, after issuing 265,000 commo for cash on 31 December. The tax rate is 30%. There were no other common share transactions during the period. Net earnings were $1,440,000. The following elements are part of ASCL's capital structure: a. ASCL had $6,400,000 (par value) of 4% bonds payable outstanding during the year. The bonds are convertible into 60 common shares for each $1,000 bond. Bond interest expense was $417,000 for the year. b. ASCL had 54,000 options outstanding throughout 20x5 to purchase 270,000 common shares for $17 per share. The average share price during the year was $29. The options were not exercisable until 20x10. CASCL had 84,000, $2.65 preferred shares outstanding. The shares were cumulative. No dividends were declared in 20X6. The shares were convertible into 64,000 common shares. d. ASCL had a contingent share agreement outstanding to issue 64,000 common shares to the prior shareholders of a company that ASCL had acquired in 20X2. The shares become issuable if the acquired company's operations accumulate $6,400,000 of post- acquisition earnings before the end of 20X8. Earnings have been $3,640,000, to date, and the target is expected to be met in 20X7. e. ASCL had $9,400,000 (par value) of 3% bonds payable, issued on 31 March 20X5. The bonds are convertible into 50 common shares for each $1,000 bond. Bond interest expense was $292,750 for the 9 months of the year that the bond was outstanding. Required: Compute basic and diluted EPS for 20X5. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
shares Ashante Sports Collections Ltd. (ASCL) ended 20X5 with 985,000 common shares outstanding, after issuing 265,000 commo for cash on 31 December. The tax rate is 30%. There were no other common share transactions during the period. Net earnings were $1,440,000. The following elements are part of ASCL's capital structure: a. ASCL had $6,400,000 (par value) of 4% bonds payable outstanding during the year. The bonds are convertible into 60 common shares for each $1,000 bond. Bond interest expense was $417,000 for the year. b. ASCL had 54,000 options outstanding throughout 20x5 to purchase 270,000 common shares for $17 per share. The average share price during the year was $29. The options were not exercisable until 20x10. CASCL had 84,000, $2.65 preferred shares outstanding. The shares were cumulative. No dividends were declared in 20X6. The shares were convertible into 64,000 common shares. d. ASCL had a contingent share agreement outstanding to issue 64,000 common shares to the prior shareholders of a company that ASCL had acquired in 20X2. The shares become issuable if the acquired company's operations accumulate $6,400,000 of post- acquisition earnings before the end of 20X8. Earnings have been $3,640,000, to date, and the target is expected to be met in 20X7. e. ASCL had $9,400,000 (par value) of 3% bonds payable, issued on 31 March 20X5. The bonds are convertible into 50 common shares for each $1,000 bond. Bond interest expense was $292,750 for the 9 months of the year that the bond was outstanding. Required: Compute basic and diluted EPS for 20X5. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hh.168.
Transcribed Image Text:A20-29 EPS, Cascade (LO 20-2, 20-3, 20-4)
Ashante Sports Collections Ltd. (ASCL) ended 20X5 with 985,000 common shares outstanding, after issuing 265,000 common shares
for cash on 31 December. The tax rate is 30%. There were no other common share transactions during the period. Net earnings were
$1,440,000. The following elements are part of ASCL's capital structure:
a. ASCL had $6,400,000 (par value) of 4% bonds payable outstanding during the year. The bonds are convertible into 60 common
shares for each $1,000 bond, Bond interest expense was $417,000 for the year.
b. ASCL had 54,000 options outstanding throughout 20x5 to purchase 270,000 common shares for $17 per share. The average share
price during the year was $29. The options were not exercisable until 20x10.
C ASCL had 84,000, $2.65 preferred shares outstanding. The shares were cumulative. No dividends were declared in 20X6. The
shares were convertible into 64,000 common shares.
ASCL
d. ASCL had a contingent share agreement outstanding to issue 64,000 common shares to the prior shareholders of a company that
ASCL had acquired in 20X2. The shares become issuable if the acquired company's operations accumulate $6,400,000 of post-
acquisition earnings before the end of 20X8. Earnings have been $3,640,000, to date, and the target is expected to be met in
20x7.
e. ASCL had $9,400,000 (par value) of 3% bonds payable, issued on 31 March 20X5. The bonds are convertible into 50 common
shares for each $1,000 bond. Bond interest expense was $292,750 for the 9 months of the year that the bond was outstanding.
Required:
Compute basic and diluted EPS for 20X5. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Basic EPS
Diluted EPS
20X5
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