Intermediate Accounting: Reporting and Analysis
2nd Edition
ISBN: 9781285453828
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 16, Problem 9MC
To determine
Identify the number of shares that are used in computing basic earnings per share and diluted earnings per share for the year ended December 31, 2016.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
PROVIDE COMPUTATION
During 2018, Angel Corporation had 900,000 shares of common
stock and 50,000 shares of 6% preferred stock outstanding. The
preferred stock does not have cumulative or convertible features.
Angel declared and paid cash dividends of $300,000 and $150,000
to common and preferred shareholders, respectively, during 2018.
On January 1, 2018, Angel issued $2,000,000 of convertible 5%
bonds at face value. Each $1,000 bond is convertible into five
common shares.
Angel's net income for the year ended December 31, 2018, was $6
million. The income tax rate is 20%.
What will Angel report as diluted earnings per share for 2018,
rounded to the nearest cent?
(EPS with Convertible Bonds and Preferred Stock) On January 1, 2017, Crocker Company issued 10-year, $2,000,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Crocker common stock. Crocker’s net income in 2017 was $300,000, and its tax rate was 40%. The company had 100,000 shares of common stock outstanding throughout 2017. None of the bonds were converted in 2017.Instructions(a) Compute diluted earnings per share for 2017.(b) Compute diluted earnings per share for 2017, assuming the same facts as above, except that $1,000,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Crocker common stock.
Chapter 16 Solutions
Intermediate Accounting: Reporting and Analysis
Ch. 16 - What are the four important dates in regard to a...Ch. 16 - How does the ex-dividend date differ from the date...Ch. 16 - Prob. 3GICh. 16 - Prob. 4GICh. 16 - Prob. 5GICh. 16 - Prob. 6GICh. 16 - How does the accounting for a liquidating dividend...Ch. 16 - Prob. 8GICh. 16 - Prob. 9GICh. 16 - Prob. 10GI
Ch. 16 - What items might a corporation include in the...Ch. 16 - Prob. 12GICh. 16 - Prob. 13GICh. 16 - Prob. 14GICh. 16 - Prob. 15GICh. 16 - On what date are stock dividends and splits...Ch. 16 - Prob. 17GICh. 16 - What two earnings per share figures generally are...Ch. 16 - Prob. 19GICh. 16 - Prob. 20GICh. 16 - Prob. 21GICh. 16 - A company with potentially dilutive share options...Ch. 16 - Prob. 23GICh. 16 - Prob. 1MCCh. 16 - A prior period adjustment should be reflected, net...Ch. 16 - Prob. 3MCCh. 16 - Effective May 1, the shareholders of Baltimore...Ch. 16 - Prob. 5MCCh. 16 - For purposes of computing the weighted average...Ch. 16 - In determining basic earnings per share, dividends...Ch. 16 - Prob. 8MCCh. 16 - Prob. 9MCCh. 16 - Prob. 10MCCh. 16 - Prob. 1RECh. 16 - Prob. 2RECh. 16 - Prob. 3RECh. 16 - Use the same facts as in RE 16-3, but instead...Ch. 16 - Given the following current year information,...Ch. 16 - In Year 2, Adams Corporation discovered that it...Ch. 16 - Howard Corporal ion had 10,000 shares of common...Ch. 16 - Given the following year-end information for...Ch. 16 - Aiken Corporation has compensatory share options...Ch. 16 - Marlboro Corporation has 9% convertible preferred...Ch. 16 - Sarasota Corporation has 9% convertible bonds...Ch. 16 - Given the following year-end information, compute...Ch. 16 - Prob. 1ECh. 16 - Dividends Andrews Company has 80,000 available to...Ch. 16 - Prob. 3ECh. 16 - Prob. 4ECh. 16 - Stock Dividend Comparison Although Oriole Company...Ch. 16 - Prob. 6ECh. 16 - Prob. 7ECh. 16 - Prob. 8ECh. 16 - Prob. 9ECh. 16 - Prob. 10ECh. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Weighted Average Shares At the beginning of the...Ch. 16 - Prob. 14ECh. 16 - Prob. 15ECh. 16 - Prob. 16ECh. 16 - Prob. 17ECh. 16 - Prob. 18ECh. 16 - Prob. 19ECh. 16 - Prob. 20ECh. 16 - Prob. 21ECh. 16 - Francis Company has 24,000 shares of common stock...Ch. 16 - Prob. 23ECh. 16 - Prob. 24ECh. 16 - Prob. 25ECh. 16 - Prob. 26ECh. 16 - Prob. 27ECh. 16 - Prob. 28ECh. 16 - Keener Company has had 1,000 shares of 7%, 100 par...Ch. 16 - Prob. 2PCh. 16 - Prob. 3PCh. 16 - Prob. 4PCh. 16 - Prob. 5PCh. 16 - Prob. 6PCh. 16 - Prob. 7PCh. 16 - Prob. 8PCh. 16 - Prob. 9PCh. 16 - Prob. 10PCh. 16 - Prob. 11PCh. 16 - Prob. 12PCh. 16 - Prob. 13PCh. 16 - Prob. 14PCh. 16 - Prob. 15PCh. 16 - Prob. 16PCh. 16 - Prob. 17PCh. 16 - Prob. 18PCh. 16 - Prob. 19PCh. 16 - Prob. 20PCh. 16 - Prob. 21PCh. 16 - Prob. 22PCh. 16 - Prob. 23PCh. 16 - Frost Company has accumulated the following...Ch. 16 - Prob. 25PCh. 16 - Prob. 26PCh. 16 - Problems may be encountered in accounting for...Ch. 16 - Stock splits and stock dividends may be used by a...Ch. 16 - Earnings per share (EPS) is the most featured...Ch. 16 - The earnings per share data required of a company...Ch. 16 - Prob. 5CCh. 16 - Public enterprises are required to present...Ch. 16 - Prob. 7CCh. 16 - Ryan Company has as a goal that its earnings per...
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
- Tama Companys capital structure consists of common stock and convertible bonds. At the beginning of 2019, Tama had 15,000 shares of common stock outstanding; an additional 4,500 shares were issued on May 4. The 7% convertible bonds have a face value of 80,000 and were issued in 2016 at par. Each 1,000 bond is convertible into 25 shares of common stock; to date, none of the bonds have been converted. During 2019, the company earned net income of 79,200 and was subject to an income tax rate of 30%. Required: Compute the 2019 diluted earnings per share.arrow_forwardPLEASE PROVIDE COMPUTATION!arrow_forwardBonita Industries, has 4230000 shares of common stock outstanding on December 31, 2020. An additional 803000 shares of common stock were issued on April 1, 2021, and 391000 more on July 1, 2021. On October 1, 2021, Bonita issued 19000, $1,000 face value, 8% convertible bonds. Each bond is convertible into 20 shares of common stock. No bonds were converted into common stock in 2021. What is the number of shares to be used in computing basic earnings per share and diluted earnings per share, respectively? A. 5027750 and 5122750 B. 5027750 and 5422750 C. 5027750 and 5027750 D.arrow_forward
- Francis Company has 24,000 shares of common stock outstanding at the beginning of 2016. Francis issued 3,000 additional shares on May 1 and 2,000 additional shares on September 30. It also has two convertible securities outstanding at the end of 2016. These are: 1. Convertible preferred stock: 2,500 shares of 8.5%, $50 par, preferred stock were issued on January 2, 2013, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted. 2. Convertible bonds: Bonds with a face value of $250,000 and an interest rate of 5.5% were issued at par in 2015. Each $1,000 bond is convertible into 20 shares of common stock. To date, no bonds have been converted. Francis earned net income of $72,500 during 2016. The income tax rate is 30%. Calculate diluted earnings per share for 2016 and the incremental EPS of the preferred stock and convertible bonds. If required, round your…arrow_forwardDuring all of 2018 Dawson Manufacturing Company had 950,000 shares of common stock outstanding. On June 30, 2018, the company issued 10,000 7 percent convertible bonds at par. The maturity value of each bond is $1,000. Each bond is convertible into 20 shares of common stock. None were converted during 2018. Dawson also had 60,000 stock warrants outstanding for all of 2018. The option price is $10 per share. The market price of the common stock was $40 on December 31, 2018, and the average market price for 2018 was $30. Dawson reported a net income of $3,650,000 for 2018. Assume the company had a 40 percent income tax rate. (a) Compute the basic earnings per share. (b) Compute diluted earnings per share (ignore the order of incremental dilutive effect). Show your works. (c) In addition to the above capital structure, assume that Dawson issued 28,000 shares of $100 par, 10% cumulative preferred stock, par $100, sold at 110 on Jan. 1, 2018.…arrow_forwardThe following information was obtained from the statement of financial position of NORWAY, INC. on December 31, 2017: 6% convertible 10-year bonds at par Ordinary share capital, P20 par, 110,000 shares issued and outstanding Retained earnings P2,000,000 2,200,000 950,000 Each P1,000 bond can be converted into 40 ordinary shares. On September 30, 2018, the bonds were all converted into ordinary shares. Norway reported net income of P600,000 in 2018. The income tax rate is 30%. 16. What is Norway's basic earnings per share for 2018? а. Р3.16 c. P5.07 b. Р4.62 d. P5.45 17. What is Norway's diluted earnings per share for 2018? а. Р2.83 с. Р3.16 b. Р3.63 d. P3.49arrow_forward
- The Fontenelle Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $600,000 of 10% convertible bonds outstanding during 2018. The preferred stock is convertible into 40,000 shares of common stock. During 2018, Fontenelle paid dividends of $.55 per share on the common stock and $1.80 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2018 was $360,000 and the income tax rate was 30%. 1. Diluted earnings per share for 2018 is (rounded to the nearest penny)?arrow_forwardOn January 1, 2018 Orion Company Limited had 7,00,000 shares to continue its business.On April 1, 2018 the company issued an additional 3,00,000 shares for cash . All10,00,000 shares were outstanding on December 31.2016. Orion Company Limited alsoissued Tk.7,00,000 of 20 years 8% convertible bonds at par on August 1,2018 . EachTk.1000 bond converts to 50 shares common at any interest date. None of the bonds havebeen converted to date. Orion Company Limited is preparing its annual report for thefiscal year ending December 31, 2018. The annual report will show earnings per sharesending figures based upon a reported after tax net income of Tk.15,40,000 ( The tax rateis 30%)Required: Compute the Basic earnings per share & Diluted earnings per share.arrow_forwardSunland Company, has 4170000 shares of common stock outstanding on December 31, 2020. An additional 803000 shares of common stock were issued on April 1, 2021, and 393000 more on July 1, 2021. On October 1, 2021, Sunland issued 19800, $1,000 face value, 8% convertible bonds. Each bond is convertible into 20 shares of common stock. No bonds were converted into common stock in 2021. What is the number of shares to be used in computing basic earnings per share and diluted earnings per share, respectively?arrow_forward
- Please Do Bot Give Image Formatarrow_forwardplease answer correctarrow_forwardCambridge Corp. has a single class of shares. As its year ended December 31, 2015, the company had 2,500,000 shares issued and outstanding. On the stock exchange, these shares are trading for $10 per share. In the company's accounts, these shares had a value of $30,000,000. The equity accounts also show $450,000 of contributed surplus from previous repurchases of shares. On January 15, 2016, Cambridge repurchased and cancelled 100,000 shares at a cost of $10 per share. Later in the year, on August 20, the company repurchased and cancelled a further 300,000 shares at $15 per share. Record the journal entries for August 20, 2016 under ASPE. Please round your final answer to the nearest dollar. Do not round intermediary answers. Do not use $ signs in your final answer. Enter $0 for any journal entries that do not apply. DR. Common shares - Type your answer here DR. Cash- Type your answer here DR. Contributed surplus - Type your answer here DR. Retained earnings - CR. Common shares - F12…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Earnings per share (EPS), basic and diluted; Author: Bionic Turtle;https://www.youtube.com/watch?v=i2IJTpvZmH4;License: Standard Youtube License