The following transactions have also occurred at Marigold.1.2.3.4.5.6.Options were granted on July 1, 2024, to purchase 180,000 shares at $16 per share. Although no options were exercisedduring fiscal year 2025, the average price per common share during fiscal year 2025 was $20 per share.Each bond was issued at face value. The 9% convertible bonds will convert into common stock at 50 shares per $1,000 bond.The bonds are exercisable after 5 years and were issued in fiscal year 2024.The preferred stock was issued in 2024.There are no preferred dividends in arrears; however, preferred dividends were not declared in fiscal year 2025.The 980,000 shares of common stock were outstanding for the entire 2025 fiscal year.Net income for fiscal year 2025 was $1,520,000, and the average income tax rate is 20%.For the fiscal year ended June 30, 2025, calculate the following for Marigold Pharmaceutical Industries. (Round answers to 2 decimalplaces, e.g. 2.45.)a. Basic earnings per share.Basic earnings per share $b. Diluted earnings per share.Diluted earnings per share $ Amy Dyken, controller at Marigold Pharmaceutical Industries, a public company, is currently preparing the calculation for basic anddiluted earnings per share and the related disclosure for Marigold's financial statements. Below is selected financial information forthe fiscal year ended June 30, 2025.Long-term debtNotes payable, 10%9% convertible bonds payable10% bonds payableTotal long-term debtMarigold Pharmaceutical IndustriesSelected Balance Sheet InformationJune 30, 2025Shareholders' equityPreferred stock, 6% cumulative, $50 par value, 98,000 shares authorized, 24,500 shares issued and outstandingCommon stock, $1 par, 9,800,000 shares authorized, 980,000 shares issued and outstandingAdditional paid-in capitalRetained earningsTotal shareholders' equity$1,010,0005,030,0005,990,000$12,030,000$1,225,000980,0004,010,0006,040,000$12,255,000

Earnings per share is a commonly used word to describe how profitable a business is. The value of…

Answered: The following transactions have also…

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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Computalog Inc. showed the following on its December 31, 2023, balance sheet: Bonds payable, convertible $ 4,040,000 Less: Unamortized discount 14,544 $ 4,025,456 Required: 1. Assuming the bonds are convertible into 404,000 common shares, journalize the conversion on January 1, 2024, when the market value per common share was $10.25. 2. How will the conversion of bonds into common shares affect the elements of the balance sheet (assets, liabilities, equity)?
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On December 31, 2019, OLGA Inc. sold convertible bonds to Nuttin Corp. for$38,375,000. The bonds have a face value of $40,000,000, a term of 10 years and coupon payments each June 30 and December 31 at 5% per annum. The yield to maturity on similar bonds without the conversion feature is 6%. The bonds areconvertible into 10 common shares for each $1,000 bond. OLGA Inc. reports under IFRS. Prepare the journal entry that OLGA Inc. should record for the issuance of these bonds at December 31, 2019
Arco, Inc. issued $300,000 of 4%, 10-year convertible bonds at par on July 1, 2022. Each bond has a par value of $1000. The bonds include the option for bondholders to convert each bond into 50 $1 par value shares of common stock beginning two years after the date of issue. The market price of the stock at the time of issue is $25 per share and the beneficial conversion option is valued at $75,000. On July 2, 2024, when the market price of the stock is $35 and the balance in the Discount account is $66,000, all of the bondholders convert the bonds. What is the proper entry to record the conversion of the bonds? Group of answer choices Date Account Debit Credit July 2, 2024 Bonds Payable 300,000 Discount on Bonds Payable 75,000 Common Stock, $1 par, 15,000 shares 300,000 Add. Paid-in Capital—Bene. Conv. Option 75,000 Date Account Debit Credit July 2, 2024 Bonds Payable 300,000 Add. Paid-in Capital—Bene. Conv. Option 75,000 Discount…
Amy Dyken, controller at Ayayai Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Ayayai's financial statements. Below is selected financial information for the fiscal year ended June 30, 2020. Ayayai Pharmaceutical Industries Selected Balance Sheet Information June 30, 2020 Long-term debt Notes payable, 10% $1,020,000 7% convertible bonds payable 4,970,000 10% bonds payable 5,980,000 Total long-term debt $11,970,000 Shareholders' equity Preferred stock, 5% cumulative, $50 par value, 95,000 shares authorized, 23,750 shares issued and outstanding $1,187,500 Common stock, $1 par, 9,900,000 shares authorized, 990,000 shares issued and outstanding 990,000 Additional paid-in capital 4,050,000 Retained earnings 5,900,000 Total shareholders' equity $12,127,500
Clear Water Corp. issued $100,000 of 7% 5 year convertible bonds on January 1, 2015. The bonds were issued at 104 and pay interest on June 30 and December 31 of each year. By December 31, 2018, the market price of the stock had increased, and the investors decided to convert the bonds into stock. Each $1,000 bond is convertable into 30 shares of the $2 par value common stock. Determine the balance of the Premium on the bonds and prepare the journal entry to record the conversion of the bonds. (two questions) GENERAL JOURNAL POST Date Account/Description REF. Debit Credit
In December 2022, Pronghorn Corp. decided to issue 100,000 convertible bonds, maturing in December 2032. The bonds have a face value of $1,000 and promise an annual coupon payment of 6.00 percent. The conversion ratio of these bonds is 25.86, and it is known that Pronghorn Corp's common shares were trading at $35 in December 2022. These bonds are rated A-, and straight bonds from similar companies with similar maturity yield 9 percent. The current market price of these bonds is $1,066. Calculate the conversion price, conversion value, SBV, floor value, and conversion premium for these bonds. (Round answers to 2 decimal places, e.g. 125.25 or 25.25%.) Conversion price Conversion value $ SBV Floor value Conversion premium $ %
On January 1, 2017, Slug Corporation issued $6.4 million of 6%, 10-year convertible bonds at 103. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of $1 par common stock. Fuzz Company purchased 30% of the issue as an investment. On July 1, 2021, Fuzz converted all of its bonds into common stock of Slug. The market price per share for Slug was $36 at the time of the conversion. Both companies use the straight-line method for amortization. Required: 1. Prepare journal entries for the issuance of the bonds on the issuer and the investor books. 2. Prepare the journal entries for the conversion on the books of the issuer and the investor. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries for the issuance of the bonds on the issuer and the investor books. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your…
On January 1, 2022, Iced Latte Corporation issued 5,000 10-year bonds of 12% P1,000 face value, each with warrants to acquire ordinary shares at P60 per share. The interest on the bonds is payable annually every December 31. Each bond contains one warrant which can be used to acquire 5 shares of P50 par value ordinary shares. It is estimated that without the warrants, the bonds would sell at 98 (at an effective interest of 12.36%) The bond price with warrants is 106. How much is the interest expense should Iced Latte Corporation reported in its Income statement for the year ended December 31, 2023?

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