Advanced Financial Accounting
11th Edition
ISBN: 9780078025877
Author: Theodore E. Christensen, David M Cottrell, Cassy JH Budd Advanced Financial Accounting
Publisher: McGraw-Hill Education
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Chapter 10, Problem 10.32P
Earnings per Share with Convertible Securities
Branch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies’
Short Retail’s 8 percent
Branch Manufacturing has 11 percent preferred stock and 12 percent bonds outstanding, neither of which is convertible. Branch reported after-tax income, excluding investment income from Short, of $100,000 in 20X4 and paid dividends of $60,000. The companies file separate tax returns and are subject to a 40 percent income tax.
Required
Compute basic and diluted EPS for the consolidated entity.
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Darren corp has the following details for one of its subsidiaries:
Long-term debt:
9% payable for notes =$1,018,000
convertible bonds payable at 7% -5,048,000
Bonds payable at 9% -6,026,000
Total long-term debt-$12,092,000
Shareholders' equity:
Preferred stock, 6% cumulative, $57 par value, 106,300 shares authorized, 26,575 shares issued and
outstanding $1,514,775
Common stock, $1 par, 10,075,000 shares authorized, 1,007,500 shares issued and outstanding=1,007,500
Additional paid-in capital=4,001,800
Retained earnings=6,018,900|
Total shareholders' equity=$12,542,975
Options were granted on July 1, 2013, to purchase 203,700 shares at $18 per share. Although no options were
exercised during fiscal year 2014, the average price per common share during fiscal year 2014 was $20 per share.
Each bond was issued at face value. The 7% convertible bonds will convert into common stock at 57 shares per
$1,000 bond. The bonds are exercisable after 5 years and were issued in fiscal year 2013.
The…
Information from the financial statements of Ames Fabricators, Inc., included the following:
Common shares
Convertible preferred shares (convertible into 42,000 shares of
common)
14,400
8% convertible bonds (convertible into 30,000 shares of common) $1,000,000
Basic
Diluted
December 31
Numerator I Denominator =
7
/
2021
100,000
Ames's net income for the year ended December 31, 2021, is $540,000. The income tax rate is 25%. Ames paid dividends of $5 per
share on its preferred stock during 2021.
=
Required:
Compute basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands (For
example, 100,000 should be entered as 100). Do not round intermediate calculations.)
Earnings per Share
2020
100,000
14,400
$1,000,000
Chapter 10 Solutions
Advanced Financial Accounting
Ch. 10 - Prob. 10.1QCh. 10 - Why are dividend payments to noncontrolling...Ch. 10 - Prob. 10.3QCh. 10 - Why are changes in inventory balances not shown in...Ch. 10 - Prob. 10.5QCh. 10 - How is an increase in inventory included in the...Ch. 10 - What portion of the sales of an acquired company...Ch. 10 - Prob. 10.8QCh. 10 - Prob. 10.9QCh. 10 - Prob. 10.10Q
Ch. 10 - Prob. 10.11QCh. 10 - Prob. 10.12QCh. 10 - Prob. 10.13QCh. 10 - Prob. 10.14QCh. 10 - How do interperiod income tax allocation...Ch. 10 - How does the use of interperiod tax allocation...Ch. 10 - Prob. 10.17QCh. 10 - Prob. 10.18QCh. 10 - Prob. 10.19QCh. 10 - When a subsidiary’s convertible bond is treated as...Ch. 10 - Prob. 10.21QCh. 10 - What effect does the presence of a noncontrolling...Ch. 10 - Prob. 10.3CCh. 10 - Consolidated Cash Flows Analysis The consolidated...Ch. 10 - Prob. 10.1ECh. 10 - Prob. 10.2ECh. 10 - Prob. 10.3ECh. 10 - Prob. 10.4ECh. 10 - Prob. 10.5ECh. 10 - Direct Method Cash Flow Statement Using the data...Ch. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Prob. 10.9ECh. 10 - Prob. 10.10ECh. 10 - Prob. 10.11ECh. 10 - Prob. 10.12ECh. 10 - Prob. 10.13ECh. 10 - Prob. 10.14ECh. 10 - Prob. 10.15ECh. 10 - Effect of Convertible Preferred Stock on Earnings...Ch. 10 - Prob. 10.17PCh. 10 - Prob. 10.18PCh. 10 - Prob. 10.19PCh. 10 - Prob. 10.20PCh. 10 - Prob. 10.21PCh. 10 - Prob. 10.22PCh. 10 - Prob. 10.23PCh. 10 - Prob. 10.24PCh. 10 - Prob. 10.25PCh. 10 - Prob. 10.26PCh. 10 - Prob. 10.27PCh. 10 - Prob. 10.29PCh. 10 - Prob. 10.30PCh. 10 - Prob. 10.31PCh. 10 - Earnings per Share with Convertible Securities...Ch. 10 - Comprehensive Earnings per Share Mighty...
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