Steven Limited's net income for the year ended December 31, 2023 was $650,250 and there were 92,000 common sharesoutstanding during the entire year. Steven has the following two convertible securities outstanding:10% convertible bonds (each $1,000 bond is convertible into 20 common shares)$200,0005% convertible $100 par value cumulative preferred shares (each share is convertible into two common shares) $125,000Both convertible securities were issued at face value in 2020. There were no conversions during 2023, and Steven's income tax rate is25%.(a)(b)X Your answer is incorrect.Calculate basic earnings per share. (For simplicity, ignore the requirement to record the debt and equity portions of theconvertible bond separately). (Round answer to 2 decimal places, e.g. 15.25.)Basic earnings per share $7.07

The objective of the question is to calculate the basic earnings per share (EPS) for Steven Limited…

Answered: Steven Limited's net income for the…

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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7. Lilac Company has 200,000 shares of ordinary shares outstanding on January 1, 2021. On March 31, 2021, 100,000 additional ordinary shares. On June 30, the company issued 10%, 100,000 convertible preference share par value of P20. The preference shares are convertible into 200,000 shares of ordinary shares. On December 31, 2021, Lilac Company reported a net income of P1,140,000 after tax and paid dividends of P300,000 to ordinary and P100,000 to preference shareholders. What is the diluted earnings per share? Group of answer choices 3.42 3.24 3.51 3.04
Waterway Industries had 200000 shares of common stock, 19300 shares of convertible preferred stock, and $592000 of 12% convertible bonds outstanding during 2021. The preferred stock is convertible into 39400 shares of common stock. During 2021, Waterway paid dividends of $0.55 per share on the common stock and $1.70 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2021 was $364000 and the income tax rate was 30%.Diluted earnings per share for 2021 is (rounded to the nearest penny)
Meman
Wild Cat Corporation has a $1,000,000 debt issue that is convertible into 10,000 prdinary shares Interest expense on the liability component of this convertible bond is $60,000. Net income for the year is $210,000, the weighted average number of ordinary shares outstanding is 100,000 shares, and the tax rate is 40 percent. In this case assumed conversion of the debt into ordinary shares at the beginning of the year. Requirement. a. Calculate Basic EPS b. Calculate Diluted EPS
Dinesh
Raymond James had 100,000 shares of common stock outstanding on January 1, 2021. On September 30, 2021, Raymond James sold 40,000 shares of common stock for cash. Raymond James also had 6,000 shares of convertible preferred stock outstanding throughout 2021. The preferred stock is $100 par, 6%, and is convertible into 3 shares of common for each share of preferred. Raymond James also had 420, 8%, convertible bonds outstanding throughout 2021. Each $1,000 bond is convertible into 30 shares of common stock. The bonds sold originally at face value. Reported net income for 2021 was $270,000 with a 40% tax rate. Common shareholders received $1.20 per share dividends after preferred dividends were paid in 2021. Required:Compute basic and diluted earnings per share for 2021. (Round your answers to 2 decimal places.)
Crane Co. had 190000 shares of common stock, 20700 shares of convertible preferred stock, and $1540000 of 4% convertible bonds outstanding during 2025. The preferred stock is convertible into 40400 shares of common stock. During 2025, Crane paid dividends of $1.00 per share on the common stock and $3 per share on the preferred stock. Each $1000 bond is convertible into 30 shares of common stock. Crane's net income for 2025 was $605000 and its income tax rate was 35%. Diluted earnings per share for 2025 was O $2.33. # O $2.19. O $2.15. O $2.63.
On June 30, 2020, when ABC shares were selling for $ 65 each, the equity accounts had the following balances: Common shares (par value $ 50: 50,000 issued) $ 2,500,000 Capital contributed in excess of par value 600,000 Retained earnings 4,200,000 A 100% share dividend is declared and distributed, the balance of the Common Shares account after recording the dividend will be: a. $2,500,000 b. $7,300,000 c. $3,100,000 d. $5,000,000
Kahlua Company had 100,000 shares of common stock outstanding on January 1st. On September 30th, Kahlua sold 48,000 shares of common stock for cash. Kahlua had 10,000 shares of convertible preferred stock outstanding throughout the year. Each preferred stock is $100 par, 6%, and is convertible into 3 shares of common stock. Kahlua also had 500, 8%, convertible bonds outstanding throughout the year. Each $1,000 bond is convertible into 30 shares of common stock. The bonds were issued at par. Net income for the year was $300,000 and the tax rate is 40%. The preferred dividends were paid during the year.Basic earnings per share reported by Kahlua Company for the year is closest to:-$2.14-$2.68-$2.06-$2.36 Diluted earnings per share reported by Kahlua Company for the year is closest to:-$2.14-$2.68-$2.06-$2.36
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Novak Inc. had net income for the current year ending December 31, 2023 of $953,780. During the entire year, there were 502,000 common shares outstanding. The company had two classes of preferred shares outstanding: the Class A preferred shares were $2.09 cumulative shares of which 12,000 were outstanding, and were convertible to common shares at a rate of 1:1. There were 103,000 $6.09 Class B non-cumulative preferred shares outstanding that were also convertible at a rate of 1:1. Novak had outstanding a $1,000,000, 6% bond issued at par in 2012 that was convertible to 21,000 common shares. The company also had outstanding a $1,000,000, 4% bond issued at par in 2013 that was convertible to 26,000 common shares. No dividends were declared or paid this year. Novak's tax rate is 37%. Determine an incremental per share effect for the 2012 bonds. (Round earnings per share to 3 decimal places, e.g. 15.257.) Potentially dilutive security 2012 Bonds Incremental Numerator Effect $ Incremental…
c. A company has $20,912,543 of net income during the year and 934,887 common shares outstanding, 96,508 of which are treasury shares, and 2,000,000 authorized shares. Assume the company has 1,000 convertible bonds with a total face value of $1,000,000 since the beginning of the year. The bonds were issued at par with a 5% coupon rate and each bond converts to 2 shares of stock. The company has an effective tax rate of 21%. Compute diluted EPS. Enter your answer in dollars rounded to 2 decimal places with no $ or commas

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