The value of basic and diluted earnings per share of the company. Giveninformation: Common shares outstanding are 320,000. Additional shares issued on August 1 are 120,000 shares. 4% non cumulative preferred stock at the beginning of year is $920,000. Preferred shared can be converted into 10,000 shares of common stock. Value of bonds outstanding on February 1 is $8,000,000. Outstanding shares of convertible options are 180,000 shares. Effective tax rate is 40%. Net income is $2,800,000.

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Answer 1

Question

Chapter 20, Problem 20.2P

a.

To determine

The value of basic and diluted earnings per share of the company.

Giveninformation:

Common shares outstanding are 320,000.

Additional shares issued on August 1 are 120,000 shares.

4% non cumulative preferred stock at the beginning of year is $920,000.

Preferred shared can be converted into 10,000 shares of common stock.

Value of bonds outstanding on February 1 is $8,000,000.

Outstanding shares of convertible options are 180,000 shares.

Effective tax rate is 40%.

Net income is $2,800,000.

b.

To determine

To prepare: The earnings per share disclosure on the income statement beginning with income of continuous operations.

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Answer 2

Question

Chapter 20, Problem 20.2P

a.

To determine

The value of basic and diluted earnings per share of the company.

Giveninformation:

Common shares outstanding are 320,000.

Additional shares issued on August 1 are 120,000 shares.

4% non cumulative preferred stock at the beginning of year is $920,000.

Preferred shared can be converted into 10,000 shares of common stock.

Value of bonds outstanding on February 1 is $8,000,000.

Outstanding shares of convertible options are 180,000 shares.

Effective tax rate is 40%.

Net income is $2,800,000.

b.

To determine

To prepare: The earnings per share disclosure on the income statement beginning with income of continuous operations.

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Answer 3

Question

Chapter 20, Problem 20.2P

a.

To determine

The value of basic and diluted earnings per share of the company.

Giveninformation:

Common shares outstanding are 320,000.

Additional shares issued on August 1 are 120,000 shares.

4% non cumulative preferred stock at the beginning of year is $920,000.

Preferred shared can be converted into 10,000 shares of common stock.

Value of bonds outstanding on February 1 is $8,000,000.

Outstanding shares of convertible options are 180,000 shares.

Effective tax rate is 40%.

Net income is $2,800,000.

b.

To determine

To prepare: The earnings per share disclosure on the income statement beginning with income of continuous operations.

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Answer 4

Question

Chapter 20, Problem 20.2P

a.

To determine

The value of basic and diluted earnings per share of the company.

Giveninformation:

Common shares outstanding are 320,000.

Additional shares issued on August 1 are 120,000 shares.

4% non cumulative preferred stock at the beginning of year is $920,000.

Preferred shared can be converted into 10,000 shares of common stock.

Value of bonds outstanding on February 1 is $8,000,000.

Outstanding shares of convertible options are 180,000 shares.

Effective tax rate is 40%.

Net income is $2,800,000.

b.

To determine

To prepare: The earnings per share disclosure on the income statement beginning with income of continuous operations.

Expert Solution & Answer

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Answer 5

Chapter 20, Problem 20.2P

a.

To determine

The value of basic and diluted earnings per share of the company.

Giveninformation:

Common shares outstanding are 320,000.

Additional shares issued on August 1 are 120,000 shares.

4% non cumulative preferred stock at the beginning of year is $920,000.

Preferred shared can be converted into 10,000 shares of common stock.

Value of bonds outstanding on February 1 is $8,000,000.

Outstanding shares of convertible options are 180,000 shares.

Effective tax rate is 40%.

Net income is $2,800,000.

b.

To determine

To prepare: The earnings per share disclosure on the income statement beginning with income of continuous operations.

Answer 6

Chapter 20, Problem 20.2P

a.

To determine

The value of basic and diluted earnings per share of the company.

Giveninformation:

Common shares outstanding are 320,000.

Additional shares issued on August 1 are 120,000 shares.

4% non cumulative preferred stock at the beginning of year is $920,000.

Preferred shared can be converted into 10,000 shares of common stock.

Value of bonds outstanding on February 1 is $8,000,000.

Outstanding shares of convertible options are 180,000 shares.

Effective tax rate is 40%.

Net income is $2,800,000.

Answer 7

Chapter 20, Problem 20.2P

a.

To determine

The value of basic and diluted earnings per share of the company.

Giveninformation:

Common shares outstanding are 320,000.

Additional shares issued on August 1 are 120,000 shares.

4% non cumulative preferred stock at the beginning of year is $920,000.

Preferred shared can be converted into 10,000 shares of common stock.

Value of bonds outstanding on February 1 is $8,000,000.

Outstanding shares of convertible options are 180,000 shares.

Effective tax rate is 40%.

Net income is $2,800,000.

Answer 8

b.

To determine

To prepare: The earnings per share disclosure on the income statement beginning with income of continuous operations.

Answer 9

b.

To determine

To prepare: The earnings per share disclosure on the income statement beginning with income of continuous operations.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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Solution Summary: The author explains the value of basic and diluted earnings per share of the company.

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To prepare: The earnings per share disclosure on the income statement beginning with income of continuous operations.

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