The following information is taken from Multi-Task Corporation’s November 30, 2021 balance sheet:Liabilities: 6% Bonds payable, $4,500,000, maturing October 31, 2024, each $1,000 bond convertible into 25 common shares at any time up to October 31, 2024 $4,500,000 Shareholders’ Equity: 7% Cumulative preferred shares, convertible at the rate of 5 common shares for 1 preferred share, 44,380 shares outstanding 957,000 Common shares, 2,675,000 shares issued and outstanding8,025,000 Multi-Task Corporation had net income for the 2021 year of $8,344,500. Multi-Task pays income tax at a rate of 28%. Both the bonds and the preferred shares were outstanding for the entire year. The weighted-average number of common shares outstanding for the 2021 year was 2,745,500.Required:Calculate basic earnings per share for Multi-Task Corporation for the year ending November 30, 2021. Calculate diluted earnings per share for Multi-Task Corporation for the year ending November 30, 2021.

Basic Earnings Per Share : Net income available to common stockholders / Weighted average number of…

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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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The following information is taken from Multi-Task Corporation’s November 30, 2021 balance sheet:

Liabilities:
6% Bonds payable, $4,500,000, maturing October 31, 2024, each $1,000 bond convertible into 25 common shares at any time up to October 31, 2024	$4,500,000

Shareholders’ Equity:
7% Cumulative preferred shares, convertible at the rate of 5 common shares for 1 preferred share, 44,380 shares outstanding	957,000

Common shares, 2,675,000 shares issued and outstanding	8,025,000

Multi-Task Corporation had net income for the 2021 year of $8,344,500. Multi-Task pays income tax at a rate of 28%. Both the bonds and the preferred shares were outstanding for the entire year. The weighted-average number of common shares outstanding for the 2021 year was 2,745,500.

Required:

Calculate basic earnings per share for Multi-Task Corporation for the year ending November 30, 2021.
Calculate diluted earnings per share for Multi-Task Corporation for the year ending November 30, 2021.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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