Please do not give image format The information below pertains to Tamarisk Company for 2021.Net income for the year7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into60 shares of common stock4% convertible, cumulative preferred stock, $100 par value; each share is convertibleinto 4 shares of common stockCommon stock, $1 par valueTax rate for 2021Average market price of common stockBasic earnings per share $(b) Compute diluted earnings per share for 2021. (Round answer to 2 decimal places, e.g. 2.55.)Diluted earnings per share$8,670,000$4,940,0002,520,000There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is notreasury stock. The company also has common stock options (granted in a prior year) to purchase 119,000 shares of common stock at$12 per share.(a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. 2.55.)9,630,00040%$17 per share

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Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 10MC

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On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.
Raun Company had the following equity items as of December 31, 2019: Preferred stock, 9% cumulative, 100 par, convertible Paid-in capital in excess of par value on preferred stock Common stock, 1 stated value Paid-in capital in excess of stated value on common stock| Retained earnings The following additional information about Raun was available for the year ended December 31, 2019: 1. There were 2 million shares of preferred stock authorized, of which 1 million were outstanding. All 1 million shares outstanding were issued on January 2, 2016, for 120 a share. The preferred stock is convertible into common stock on a 1-for-1 basis until December 31, 2025; thereafter, the preferred stock ceases to be convertible and is callable at par value by the company. No preferred stock has been converted into common stock, and there were no dividends in arrears at December 31, 2019. 2. The common stock has been issued at amounts above stated value per share since incorporation in 2002. Of the 5 million shares authorized, 3,580,000 were outstanding at January 1, 2019. The market price of the outstanding common stock has increased slowly but consistently for the last 5 years. 3. Raun has an employee share option plan where certain key employees and officers may purchase shares of common stock at 100% of the marker price at the date of the option grant. All options are exercisable in installments of one-third each year, commencing 1 year after the date of the grant, and expire if not exercised within 4 years of the grant date. On January 1, 2019, options for 70,000 shares were outstanding at prices ranging from 47 to 83 a share. Options for 20,000 shares were exercised at 47 to 79 a share during 2019. During 2019, no options expired and additional options for 15,000 shares were granted at 86 a share. The 65,000 options outstanding at December 31, 2019, were exercisable at 54 to 86 a share; of these, 30,000 were exercisable at that date at prices ranging from 54 to 79 a share. 4. Raun also has an employee share purchase plan whereby the company pays one-half and the employee pays one-half of the market price of the stock at the date of the subscription. During 2019, employees subscribed to 60,000 shares at an average price of 87 a share. All 60,000 shares were paid for and issued late in September 2019. 5. On December 31, 2019, there was a total of 355,000 shares of common stock set aside for the granting of future share options and for future purchases under the employee share purchase plan. The only changes in the shareholders equity for 2019 were those described previously, the 2019 net income, and the cash dividends paid. Required: Prepare the shareholders equity section of Rauns balance sheet at December 31, 2019. Substitute, where appropriate, Xs for unknown dollar amounts. Use good form and provide full disclosure. Write appropriate notes as they should appear in the publisher financial statements.
The information below pertains to Metlock Company for 2026. Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2026 Average market price of common stock Basic earnings per share $ b. Compute diluted earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share $1,230,000 $ 1,990,000 4,110,000 There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 68,200 shares of common stock at $20 per share. a. Compute basic earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) 6,270,000 20% $25 per share
The information below pertains to Coronado Company for 2021. Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2021 Average market price of common stock Basic earnings per share $ $1,160,000 There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 82,100 shares of common stock at $20 per share. (a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $ 2,010,000 4,080,000 5,800,000 20% $25 per share (b) Compute diluted earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.)
The information below pertains to Pierpont Corp. for 2020: Net income, $1,200,000. Common Stock, $10 par value per share, total par value $3,000,000. D% Convertible and Cumulative Preferred Stock, S100 par value per share, each share convertible into 3 shares of common stock. The preferred stock was issued in 2018. Total par value $4,000,000. 7% Convertible Bonds Payable, issued at face value of $1,000 per bond, in 2019. Each bond is convertible into 30 shares on common stock. Total face value $2,000,000. Stock options granted in 2019 to purchase 75,000 shares of common stock at $20 per share, none of which have been exercised to date. Income tax rate, 20%. Average market price of the common stock during 2020 was $25 per share. There were no changes during 2020 in the number of common shares outstanding, number of preferred shares outstanding, or number of convertible bonds outstanding. There are no treasury shares held by Pierpont. REQUIRED: 1. Calculate basic earnings per share for…
(b) Calculate basic earnings per share. (Round answer to 2 decimal places, e.g. 15.25.) Basic EPS $
Following is information taken from Vaughn Inc.'s December 31, 2023 SFP: 5% bonds payable, $5,774,000 maturing December 31, 2025, each $1,000 bond convertible into 20 common shares 8% bonds payable, $5,326,000, maturing December 31, 2026, each $1,000 bond convertible into 26 common shares at any time up to December 31, 2026 Cumulative preferred shares, $5, no-par value, convertible at 1 preferred share for 4 common shares, 51,400 shares outstanding Common shares, no par-value, 3,196,000 shares outstanding (a) Calculate the income effect of the dividends on the preferred shares. Vaughn's net income for 2023 was $8,681,000, and the company was subject to an income tax rate of 20%. Both classes of bonds were outstanding the entire year, as were the preferred shares. The weighted-average number of common shares outstanding during the period was 3,744,000. Dividends on preferred shares $ $5,774,000 LA $5,326,000 $1,028,000
Following is information taken from Blossom Inc.’s December 31, 2020 balance sheet: 8% bonds payable, $5,200,000 maturing December 31, 2023,each $1,000 bond convertible into 17 common shares $5,200,000 5% bonds payable, $3,200,000, maturing December 31, 2025,each $1,000 bond convertible into 51 common shares at any time up to December 31, 2023 $3,200,000 Cumulative preferred shares, $4, no-par value, convertible at1 preferred share for 4 common shares, 104,000 shares outstanding $2,704,000 Common shares, no par-value, 2,500,000 shares outstanding Blossom’s net income after tax for 2020 was $5,516,000, and the company was subject to an income tax rate of 42%. Both classes of bonds were outstanding the entire year, as were the preferred shares. The weighted-average number of common shares outstanding during the period was 2,400,000. (For simplicity, ignore the requirement to record the debt and equity portions of the convertible bond separately).…
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Peter Corp. issued 1,700 7%, 5-year, $1,000 bonds dated January 1, 2022, at face value. Interest is paid each January 1. The adjusting journal entry on December 31. 2022, to record interest expense, would require a debit to interest expense and credit to interest payable in the amount of Your Answer: Answer The following data is available for Siddiqui Corporation at December 31, 2022: Common stock, par $10 (authorized 1,119,500 shares) Treasury stock (at cost $30 per share) $264.900 $1,430 Based on the data, how many shares of common stock are outstanding? (Round your answer to the nearest whole number-zero decimal places)
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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…

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