The information below pertains to Windsor Company for 2026.Net income for the year7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stockCommon stock, $10 par valueTax rate for 2026Average market price of common stock4a. Compute basic earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.)Basic earnings per share $b. Compute diluted earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.)Diluted earnings per shareThere were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is notreasury stock. The company also has common stock options (granted in a prior year) to purchase 71,800 shares of common stock at$20 per share.eTextbook and Media1.65$$1,210,001,970,004,200,005,820,0020%$25 per shar▶

Earnings per share refers to the earnings attributable to the outstanding common stockholders in the…

The information below pertains to Windsor Company for 2026. Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2026 Average market price of common stock 4 $1,210,00 1,970,00 4,200,00 5,820,00 20% $25 per shar There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 71,800 shares of common stock at

The information below pertains to Windsor Company for 2026. Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2026 Average market price of common stock 4 $1,210,00 1,970,00 4,200,00 5,820,00 20% $25 per shar There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 71,800 shares of common stock at

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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Convertible Debt – SHOW ALL CALCULATIONS Nexus Ltd. issued convertible bonds on July 1, 2004. The $5,000,000 bonds pay annual interest of 8% each July 1 and mature on July 1, 2020. Each $1,000 bond is convertible into 50 common shares at the investor’s option. Nexus received proceeds of $5,350,000 for the bond at issue date. The market (yield) rate is 9%. Required: Prepare the journal entry on Nexus’ books at issuance using the incremental method. Assume Nexus decided to repay (retire) the bonds early on July 1, 2008, after interest is recorded. Record the early repayment assuming Nexus pays investors $5,095,000 of which $728,000 is allocated to the conversion rights. Instead of part b) assume investor’s decided to convert 30% of their bonds at July 1, 2008, after interest is recorded. Record the conversion on Nexus’ books.
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1. Pamela Company showed the following accounts on December 31, 2020. Bonds Payable 5,000,000 Premium on Bonds Payable 250,000 Share capital- 250,000 shares authorized and 200,000 shares issued, P50 par 10,000,000 Share premium- issuance 2,000,000 Share premium-conversion privilege 500,000 Retained earnings 2,500,000 The bonds are convertible into 10 shares of capital for every P 1,000 bond. On December 31, 2020, the entire bond issue was converted and on this date, the market value of the share is 120 and the market value of the bonds is 103. The entity paid P 200,000 as a result of the bond conversion. Required: Prepare journal entries for the conversion of the bonds on December 31, 2020
Convertible Bonds Instructions Chart of Accounts General Journal X Instructions On January 1, 2018, when its $30 par value common stock was selling for $60 per share, a corporation issued $30 million of 12% convertible debentures due in 10 years. The conversion option allowed the holder of each $1,000 bond to convert it into six shares of the corporation’s $30 par value common stock. The debentures were issued for $31 million. At the time of issuance, the present value of the bond payments was $28.50 million, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2019, the corporation’s $30 par value common stock was split 3 for 1. On January 1, 2020, when the corporation’s $10 par value common stock was selling for $70 per share, holders of 40% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method…
Dinesh
Current Attempt in Progress On January 2, 2021, Crane Company issued at par $1920000 of 5% convertible bonds. Each $1000 bond is convertible into 10 shares of common stock. No bonds were converted during 2021. Crane had 206000 shares of common stock outstanding during 2021. Crane's 2021 net income was $904000 and the income tax rate was 25%. Crane's diluted earnings per share for 2021 would be (rounded to the nearest penny): O $4.47. O $4.77. O $4.39. O $4.33. Save for Later Attempts: 0 of 1 used Submit Answer MacBook Air
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EPS with Convertible Bonds and Preferred Stock The Ehrlich Corporation issued 10-year, $5,000,000 par, 7% callable convertible bonds on January 2, 2022. The bonds have a par value of $1,000, with interest payable annually. Each bond is convertible into 18 shares of common stock. The bonds were issued at 100. Ehrlich's effective tax was 20%. Net income in 2022 was $9,500,000, and the company had 2,000,000 shares outstanding during the entire year.Instructions: a. Compute both basic and diluted earnings per share. Show calculations. b. Recompute the schedule as if the security was convertible cumulative preferred stock, $5,000,000, 8%, $100 par value. Each share of preferred stock is convertible into 1 share of common stock.
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The table below shows a partial view of Webster Corporation's balancesheet. Webster CorporationBalance Sheet (partial)At December 31, 2021 Long-term debt Notes payable 10% $2,000,00010% convertible bonds payable 2,500,00012% convertible bonds payable 3,000,000Total long-term debt $7,500,000 Stockholders' equity 6% cumulative, convertiblepreferred stock, $100 par, 50,000shares outstanding. 5,000,000 Common stock, $1 par, 600,000shares outstanding. 600,000Additional paid-in capital 2,500,000 Retained earnings 8,500,000Total stockholders' equity $16,600,000 Notes and Assumptions December 31, 20211. Options were granted in December 2020 to purchase 25,000 shares of common stock at $25 per share. The average market price of common stock during 2021 was $35 per share. All options are still outstanding atthe end of 2021 2. Both the 10 percent and 12 percent convertible bonds were issued in2020 at face value. Each convertible bond is convertible into 50 shares of common stock.…
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