Sheridan Inc. has 0.95 million common shares outstanding as at January 1, 2020. On June 30, 2020, 4% convertible bonds were converted into 105,000 additional shares. Up to that point, the bonds had paid interest of $210,000 after tax. Net income for the year was $1,298,196. During the year, the company issued the following: 1. June 30: 12,300 call options giving holders the right to purchase shares of the company for $25 2. Sept. 30: 17,300 put options allowing holders to sell shares of the company for $20 On February 1, Sheridan also purchased in the open market 12,300 call options on its own shares, allowing it to purchase its own shares for $22. Assume the average market price for the shares during the year was $30. Calculate the required EPS numbers under IFRS. For simplicity, ignore the impact that would result from the convertible debt being a hybrid security.
Sheridan Inc. has 0.95 million common shares outstanding as at January 1, 2020. On June 30, 2020, 4% convertible bonds were converted into 105,000 additional shares. Up to that point, the bonds had paid interest of $210,000 after tax. Net income for the year was $1,298,196. During the year, the company issued the following: 1. June 30: 12,300 call options giving holders the right to purchase shares of the company for $25 2. Sept. 30: 17,300 put options allowing holders to sell shares of the company for $20 On February 1, Sheridan also purchased in the open market 12,300 call options on its own shares, allowing it to purchase its own shares for $22. Assume the average market price for the shares during the year was $30. Calculate the required EPS numbers under IFRS. For simplicity, ignore the impact that would result from the convertible debt being a hybrid security.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sheridan Inc. has 0.95 million common shares outstanding as at January 1, 2020. On June 30, 2020, 4% convertible bonds were converted into 105,000 additional shares. Up to that point, the bonds had paid interest of $210,000 after tax. Net income for the year was $1,298,196. During the year, the company issued the following:
| 1. | June 30: | 12,300 call options giving holders the right to purchase shares of the company for $25 | ||
| 2. | Sept. 30: | 17,300 put options allowing holders to sell shares of the company for $20 |
On February 1, Sheridan also purchased in the open market 12,300 call options on its own shares, allowing it to purchase its own shares for $22. Assume the average market price for the shares during the year was $30.
Calculate the required EPS numbers under IFRS. For simplicity, ignore the impact that would result from the convertible debt being a hybrid security.
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