FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Question
![Exercise 19-19 (Algo) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold;
stock options; convertible bonds [LO19-5,19-6, 19-7, 19-8, 19-9]
On December 31, 2020, Berclair Inc. had 280 million shares of common stock and 3 million shares of 9%, $100 par value cumulative
preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 24 million shares of its common stock as treasury stock.
Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the
year ended December 31, 2021, was $250 million. The income tax rate is 25%.
Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2016. The options are
exercisable as of September 13, 2020, for 30 million common shares at an exercise price of $56 per share. During 2021, the market
price of the common shares averaged $70 per share.
In 2017, $50.0 million of 8% bonds, convertible into 6 million common shares, were issued at face value.
Required:
Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in millions (i.e.,
10,000,000 should be entered as 10). Do not round intermediate calculations.)
Numerator
Denominator
Earnings per Share
=
Basic
Diluted
%3D](https://content.bartleby.com/qna-images/question/1bc7a40b-dffa-4a62-bd66-b416eeb3fe46/c81240c6-5489-4be0-879e-d7345c735330/yxbb7cf_processed.png)
Transcribed Image Text:Exercise 19-19 (Algo) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold;
stock options; convertible bonds [LO19-5,19-6, 19-7, 19-8, 19-9]
On December 31, 2020, Berclair Inc. had 280 million shares of common stock and 3 million shares of 9%, $100 par value cumulative
preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 24 million shares of its common stock as treasury stock.
Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the
year ended December 31, 2021, was $250 million. The income tax rate is 25%.
Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2016. The options are
exercisable as of September 13, 2020, for 30 million common shares at an exercise price of $56 per share. During 2021, the market
price of the common shares averaged $70 per share.
In 2017, $50.0 million of 8% bonds, convertible into 6 million common shares, were issued at face value.
Required:
Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in millions (i.e.,
10,000,000 should be entered as 10). Do not round intermediate calculations.)
Numerator
Denominator
Earnings per Share
=
Basic
Diluted
%3D
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- On December 31, 2023, Berclair Incorporated had 480 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. . On March 1, 2024, Berclair purchased 24 million shares of its common stock as treasury stock. • Berclair issued a 5% common stock dividend on July 1, 2024. • Four million treasury shares were sold on October 1. • Net income for the year ended December 31, 2024, was $750 million. . The income tax rate is 25%. • Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2019. • The options are exercisable as of September 13, 2023, for 30 million common shares at an exercise price of $56 per share. . During 2024, the market price of the common shares averaged $70 per share. • In 2020, $50.0 million of 8% bonds, convertible into 6 million common shares, were issued at face value. Required: Compute Berclair's basic and diluted earnings per share for the year ended…arrow_forwardOn December 31, 2023, Berclair Incorporated had 540 million shares of common stock and 21 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 24 million shares of its common stock as treasury stock. • Berclair issued a 5% common stock dividend on July 1, 2024. • Four million treasury shares were sold on October 1. • Net income for the year ended December 31, 2024, was $1,050 million. • Also outstanding at December 31 were 84 million incentive stock options granted to key executives on September 13, 2019. • The options were exercisable as of September 13, 2023, for 84 million common shares at an exercise price of $75 per share. • During 2024, the market price of the common shares averaged $100 per share. • The options were exercised on September 1, 2024. Required: Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible…arrow_forwardDulcinea Corporation had $1,000,000 of net income in 2022. On January 1, 2022, there were 225,000 shares of common stock outstanding. On April 1, there were 12,000 additional shares issued. On July 1, Dulcinea issued a 10% stock dividend and on September 1, Dulcinea bought 20,000 shares of treasury stock. The market price of the common stock averaged $30 during 2022. The tax rate is 30%. During 2022, there were 10,000 shares of cumulative, convertible preferred stock outstanding. The preferred is $100 par, pays $4 per share in dividends per year and each share of preferred stock is convertible into two shares of common stock. Dulcinea issued $5,000,000 of 5% convertible bonds at face value ten years earlier. All bonds remained outstanding throughout 2022. Each $1,000 bond is convertible into 10 shares of common stock. Required: Calculate the weighted average number of shares outstanding for 2022 to be used to calculate basic earnings per share. Compute basic…arrow_forward
- jituarrow_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_forwardMarutzky Corporation had a net income of $2,200,000 for the year 2018. On January 1, 2018, the corporation had 300,000 shares of common stock outstanding and issued an additional 250,000 shares of common stock on October 1, 2018. Calculate the earnings per shares using the weighted-average number of common shares outstanding.arrow_forward
- On December 31, 2023, Berclair Incorporated had 420 million shares of common stock and 7 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 36 million shares of its common stock as treasury stock. • Berclair issued a 5% common stock dividend on July 1, 2024. Six million treasury shares were sold on October 1. .Net income for the year ended December 31, 2024, was $700 million. Required: Compute Berclair's earnings per share for the year ended December 31, 2024. Note: Do not round intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Numerator 4. Denominator Earnings per Share =arrow_forwardOn December 31, 2023, Berclair Incorporated had 280 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2024. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2024, was $250 million. The income tax rate is 25%. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2019. The options are exercisable as of September 13, 2023, for 30 million common shares at an exercise price of $56 per share. During 2024, the market price of the common shares averaged $70 per share. In 2020, $50.0 million of 8% bonds, convertible into 6 million common shares, were issued at face value. Required: Compute Berclair’s basic and diluted earnings per share for the year ended December 31, 2024.…arrow_forwardOn December 31, 2020, Brisbane Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2021, Brisbane purchased 24,000 shares of common stock on the open market as treasury stock paying $40 per share. Brisbane sold 6,000 treasury shares on September 30, 2021, for $45 per share. Net income for 2021 was $180,905. Also outstanding during the year were fully vested incentive stock options giving key officers the option to buy 50,000 common shares at $40. The market price of the common shares averaged $50 during 2021. Compute Brisbane's basic and diluted earnings per share (rounded to 2 decimal places) for 2021.arrow_forward
- On December 31, 2020, Berclair Inc. had 460 million shares of common stock and 9 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 48 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Eight million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $800 million. Required: Compute Berclair's earnings per share for the year ended December 31, 2021. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)arrow_forwardOn December 31, 2023, Berclair Incorporated had 600 million shares of common stock and 17 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. • On March 1, 2024, Berclair purchased 120 million shares of its common stock as treasury stock. Berclair issued a 6% common stock dividend on July 1, 2024. • Four million treasury shares were sold on October 1. • Net income for the year ended December 31, 2024, was $850 million. • Also outstanding at December 31 were 72 million incentive stock options granted to key executives on September 13, 2019. • The options were exercisable as of September 13, 2023, for 72 million common shares at an exercise price of $60 per share. . During 2024, the market price of the common shares averaged $90 per share. The options were exercised on September 1, 2024. Required: Compute Berclair's basic and diluted earings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible…arrow_forwardOn January 1, 2022, NYC Co. had 1,191,000 shares of its $12 par value common stock outstanding. On March 1, NYC Co. sold an additional 2,382,000 shares for $48 per share. The company issued a 15% stock dividend on May 1. On August 1, NYC Co. repurchased 715,000 shares of its stock. On November 1, 1,072,500 shares were sold for $50 per share. What is the weighted- average number of shares outstanding for 2022? (NIE) 4,129,067 3,175,733 3,533,233 3,771,567arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education