On January 1, 2021, Simple Company provided the followinginformation.Ordinary share capital, P100, 100,000 shares12% bonds payable issued at face amount,each P1,000 bond is convertible into 20ordinary shares10,000,0004,000,000On April 1, 2021, bonds with face amount of P3,000,000 wereactually converted into ordinary share.The net income for the current year was P2,320,000 and theincome tax rate is 30%.Required:1. Basic earnings per share2. Diluted earnings per share

Earning Per Share: Net profit divided by the number of common shares issued and outstanding is the…

On January 1, 2021, Simple Company pre information. 10,000,000 Ordinary share capital, P100, 100,000 shares 12% bonds payable issued at face amount, each P1,000 bond is convertible into 20 ordinary shares 4,000,000 On April 1, 2021, bonds with face amount of P3,000,000 were actually converted into ordinary share. The net income for the current year was P2,320,000 and the income tax rate is 30%. Required: 1. Basic earnings per share 2. Diluted earnings per share

On January 1, 2021, Simple Company pre information. 10,000,000 Ordinary share capital, P100, 100,000 shares 12% bonds payable issued at face amount, each P1,000 bond is convertible into 20 ordinary shares 4,000,000 On April 1, 2021, bonds with face amount of P3,000,000 were actually converted into ordinary share. The net income for the current year was P2,320,000 and the income tax rate is 30%. Required: 1. Basic earnings per share 2. Diluted earnings per share

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 26E: Tama Companys capital structure consists of common stock and convertible bonds. At the beginning of...

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Frost Company has accumulated the following information relevant to its 2019 earningsper share. 1. Net income for 2019: 150,500. 2. Bonds payable: On January 1, 2019, the company had issued 10%, 200,000 bonds at 110. The premium is being amortized in the amount of 1,000 per year. Each 1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted. 3. Bonds payable: On December 31, 2017, the company had issued 540,000 of 5.8% bonds at par. Each 1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds have been converted. 4. Preferred stock: On July 3, 2018, the company had issued 3,800 shares of 7.5%, 100 par, preferred stock at 108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid. 5. Common stock: At the beginning of 2019, 25,000 shares were outstanding. On August 3, 7,000 additional shares were issued. During September, a 20% stock dividend was declared and issued. On November 30, 2,000 shares were reacquired as treasury stock. 6. Compensatory share options: Options to acquire common stock at a price of 33 per share were outstanding during all of 2019. Currently, 4,000 shares may be acquired. To date, no options have been exercised. The unrecognized compens Frost Company has accumulated the following information relevant to its 2019 earnings ns is 5 per share. 7. Miscellaneous: Stock market prices on common stock averaged 41 per share during 2019, and the 2019 ending stock market price was 40 per share. The corporate income tax rate is 30%. Required: 1. Compute the basic earnings per share. Show supporting calculations. 2. Compute the diluted earnings per share. Show supporting calculations. 3. Indicate which earnings per share figure(s) Frost would report on its 2019 income statement.
Tama Companys capital structure consists of common stock and convertible bonds. At the beginning of 2019, Tama had 15,000 shares of common stock outstanding; an additional 4,500 shares were issued on May 4. The 7% convertible bonds have a face value of 80,000 and were issued in 2016 at par. Each 1,000 bond is convertible into 25 shares of common stock; to date, none of the bonds have been converted. During 2019, the company earned net income of 79,200 and was subject to an income tax rate of 30%. Required: Compute the 2019 diluted earnings per share.
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.
Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.
Contributed Capital Adams Companys records provide the following information on December 31, 2019: Additional information: 1. Common stock has a 5 par value, 50,000 shares are authorized, 15,000 shares have been issued and are outstanding. 2. Preferred stock has a 100 par value, 3,000 shares are authorized, 800 shares have been issued and are outstanding. Two hundred shares have been subscribed at 120 per share. The stock pays an 8% dividend, is cumulative, and is callable at 130 per share. 3. Bonds payable mature on January 1, 2023. They carry a 12% annual interest rate, payable semiannually. Required: Prepare the Contributed Capital section of the December 31, 2019, balance sheet for Adams. Include appropriate parenthetical notes.
Hyde Corporations capital structure at December 31, 2018, was as follows: On July 2, 2019, Hyde issued a 10% stock dividend on its common stock and paid a cash dividend of 2.00 per share on its preferred stock. Net income for the year ended December 31, 2019, was 780,000. What should be Hydes 2019 basic earnings per share? a. 7.80 b. 7.09 c. 7.68 d. 6.73
Shirley company presented the following information On January 1, 2019: Ordinary share capital, P100, 50,000 shares 5,000,000 12% bonds payable issued at face amount, each P1,000 bond is convertible into 20 ordinary shares 2,000,000 On April 1, 2019, bonds with face amount of P1,500,000 were actually converted into ordinary share. The entity reported net income of P1,160,000 and the income tax rate is 30%. Compute the basic earnings per share and diluted earnings per share.
On April 1, 2021, River Company issued P2,000,000 12% bonds at face amount. Each P1,000 bond is convertible into 10 ordinary shares. The entity reported net income of P2,749,000 for the year ´ended December 31, 2021. The average number of ordinary shares outstanding was 100,000 shares and the income tax rate is 30%. Required: 1. Basic earnings per share 2. Diluted earnings per share.
An entity provided the following information on December 31, 2020: · Accounts payable amounted P1,500,000 · On December 15, 2020, the entity declared a cash dividend of P20 per share on 100,000 outstanding shares, payable on January 15, 2021 · On July 1, 2020, the entity issued P5,000,000, 8% bonds for P4,400,000 to yield 10%. The bonds mature on June 30, 2025 and pay interest annually every June 30. · The pretax financial income was P8,500,000 and taxable income was P6,000,000. The difference is due to P1,000,000 permanent difference and P1,500,000 taxable temporary difference to reverse 2021. The income tax rate is 30%. The entity made estimated income tax payments during the current year of P1,000,000. What amount should be reported as total current liabilities on December 31, 2020?
An entity provided the following information on December 31, 2020: Accounts payable amounted P1,500,000 On December 15, 2020, the entity declared a cash dividend of P20 per share on 100,000 outstanding shares, payable on January 15, 2021 On July 1, 2020, the entity issued P5,000,000, 8% bonds for P4,400,000 to yield 10%. The bonds mature on June 30, 2025 and pay interest annually every June 30. The pretax financial income was P8,500,000 and taxable income was P6,000,000. The difference is due to P1,000,000 permanent difference and P1,500,000 taxable temporary difference to reverse 2021. The income tax rate is 30%. The entity made estimated income tax payments during the current year of P1,000,000. What amount should be reported as total current liabilities on December 31, 2020? 3,700,000 5,500,000 4,700,000 4,500,000 An entity reported the following data on December 31, 2020: Cash in bank, net of bank overdraft of P100,000 1,200,000 Petty cash,…
On January 01, 2022, DEF Company provided the following information: Ordinary share capital, P50, 150,000 shares 7,500,000 10% bonds payable, each P1,000 is convertible into 20 ordinary shares 6,000,000 On June 30, bonds with face amount of P3,000,000 were actually converted into ordinary shares. The net income for the current year was P2,115,000 and the income tax rate is 30%. Diluted EPSa. 10.13b. 12.15c. 9.00d. 11.57
An entity had the following securities outstanding as of December 31, 2021: 10% convertible bonds payable, each P1,000 bond convertible into ten ordinary shares Ordinary share capital P100 par, 250,000 shares authorized, 100,000 shares issued Net income 4,000,000 10,000,000 5,000,000 Income tax rate 30% Requirement: A. Compute for the Basic earnings per share. B. Compute for the Diluted earnings per share.