FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
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On December 31, 2019, LBC Co. had 2,000,000 shares of ordinary shares outstanding.
On January 1 2020, LBC Co. issued 500,000 shares of preference shares, which were convertible into 1,000,000 shares of ordinary shares. During 2020, LBC Codeclared and paid P1,500,000 cash dividends on the ordinary shares and P500,000 cash dividends on the
Net income for 2020 was 5,000,000.
If income tax rate is 30%, how much is the diluted EPS for the year ended December 31 , 2020?
A. 1.50
B. 1.67
C.2.08
D. 2.50
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- Hanshabenarrow_forwardOn May 2020 GSW was organized with 3,000,000 authorized shares of P10 par value ordinary shares, and 300,000 of its ordinary shares were issued for P3,300,000. Net income through December 31, 2020 was P125,000. On July 23, 2021, when the shares were selling at P13 per share, GSW issued 500,000 of its ordinary shares in exchange of a real estate properties which were fairly valued at P6,250,000. A 5% share dividend was declared on October 2, 2021, to shareholders of record on October 23, 2021. The market value of the ordinary shares was P11 per share on the declaration date. GSW net income for the year ended December 31, 2021 was P350,000. During 2022, GSW had the following transactions: In February, GSW reacquired 15,000 of its treasury shares for P12 per share. In June, GSW sold 15,000 of its treasury shares for P12 per share. In September, each shareholder was issued (for each share held) one right to purchase two additional ordinary shares for P13 per share. The rights shall expire…arrow_forwardOn January 1, 2020, a company issued 10-year, $330,000 face value, 7% bonds, at par. Each $1,000 bond is convertible into 11 shares of common stock. The company’s net income in the year was $460,000, and its tax rate was 24%. The company had 100,000 shares of common stock outstanding throughout 2020. What is the numerator for computing diluted earnings per share for 2020?arrow_forward
- Lilac Company has 200,000 shares of ordinary shares outstanding on January 1, 2021. On March 31, 2021, 100,000 additional ordinary shares. On June 30, the company issued 10%, 100,000 convertible preference share par value of P20. The preference shares are convertible into 200,000 shares of ordinary shares. On December 31, 2021, Lilac Company reported a net income of P1,140,000 after tax and paid dividends of P300,000 to ordinary and P100,000 to preference shareholders. What is the diluted earnings per share? Group of answer choices 3.42 3.51 3.24 3.04arrow_forwardAtlanta Co. has 100,000 common shares outstanding as of January 1, 2020 and after-tax net income of $300,000 for 2020. On March 31, 2020 Atlanta Co repurchased 5,000 shares of its outstanding common stock. On October 1, 2020, the company issues an additional 50,000 shares of common stock. On October 31, 2020 the company distributed a stock dividend of 40%. The company also has 20,000 shares of 4% $10 par cumulative preferred stock outstanding. Assume that 5,000 shares of the preferred stock have the option to be converted to 2,000 shares of common stock at any time. In 2019 Atlanta Co. issued stock options to its 2 top executives that allow them to each purchase up to 1,000 shares of common stock at a purchase price of $25 per share. The current market price of Atlanta Co common stock is $40 per share and Atlanta Co.’s income tax rate is 30%. Compute the Basic EPS___________________________ Compute Fully Diluted EPS_________________________ *Urgentarrow_forwardAt December 31, 2019, Hemington Company had 320,000 shares of common stock outstanding. Hemington sold 80,000 shares on October 1, 2020. Net income for 2020 was $1,985,000; the income tax rate was 35%. In addition, Hemington had the following debt and equity securities on its books at December 31, 2019. (a) 30,000 shares of $100 par, 8% cumulative preferred stock (b) 25,000 shares of 10% convertible cumulative preferred stock, par $100, sold at 110. Each share of preferred stock is convertible into three shares of common stock. (c) $1,500,000 face value of 9% bonds sold at par. (d) $2,500,000 face value of 7% convertible bonds sold to yield 8%. Unamortized bond discount is $150,000 at December 31, 2019. Each $1,000 bond is convertible into 22 shares of common stock. Also, options to purchase 20,000 shares of common stock were issued May 1, 2020. Exercise price is $20 per share; market value at date of option was $19; average market value for the year (and for the period…arrow_forward
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