On June 1, 2023, Andre Company and Agassi Company merged to form Lancaster Inc. A total of 800,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2025, the company issued an additional 400,000 shares of stock for cash. All 1,200,000 shares were outstanding on December 31, 2025. Lancaster Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2025. Each $1,000 bond converts to 40 shares of common at any interest date. None of the bonds have been converted to date. Lancaster Inc. is preparing its annual report for the fiscal year ending December 31, 2025. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,540,000. (The tax rate is 20%.) Determine the following for 2025. a. The number of shares to be used for calculating: (Round answers to O decimal places, e.g. 2,500.) 1. 2. Diluted earnings per share Basic earnings per share 1. Basic earnings per share N b. The earnings figures to be used for calculating: (Round answers to O decimal places, e.g. 2,500.) 2. Diluted earnings per share 5 shares $ shares

On June 1, 2023, Andre Company and Agassi Company merged to form Lancaster Inc. A total of 800,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2025, the company issued an additional 400,000 shares of stock for cash. All 1,200,000 shares were outstanding on December 31, 2025. Lancaster Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2025. Each $1,000 bond converts to 40 shares of common at any interest date. None of the bonds have been converted to date. Lancaster Inc. is preparing its annual report for the fiscal year ending December 31, 2025. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,540,000. (The tax rate is 20%.) Determine the following for 2025. a. The number of shares to be used for calculating: (Round answers to O decimal places, e.g. 2,500.) 1. 2. Diluted earnings per share Basic earnings per share 1. Basic earnings per share N b. The earnings figures to be used for calculating: (Round answers to O decimal places, e.g. 2,500.) 2. Diluted earnings per share 5 shares $ shares

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On June 1, 2018, Indigo Company and Sweet Company merged to form Pharoah Inc. A total of 870,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis.On April 1, 2020, the company issued an additional 543,000 shares of stock for cash. All 1,413,000 shares were outstanding on December 31, 2020.Pharoah Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 38 shares of common at any interest date. None of the bonds have been converted to date.Pharoah Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,613,000. (The tax rate is 20%.)Determine the following for 2020. a) - Basic Earnings per share - Diluted Earnings per share b) the earnings used to calculate: - Basic Earnings per share - Diluted Earnings per share
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On June 1, 2023, Novak Company and Splish Company merged to form Blossom Inc. A total of 877,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2025, the company issued an additional 652,000 shares of stock for cash. All 1,529,000 shares were outstanding on December 31, 2025. Blossom Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2025. Each $1,000 bond converts to 44 shares of common at any interest date. None of the bonds have been converted to date. Blossom Inc. is preparing its annual report for the fiscal year ending December 31, 2025. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,444,000. (The tax rate is 20%.) Determine the following for 2025. a. The number of shares to be used for calculating: (Round answers to O decimal places, e.g. 2,500.) 1. 2. 1. Basic earnings per share 2. Diluted earnings per share Basic earnings per share b.…
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