Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Chapter 20, Problem 20.8E
Computing Basic and Diluted EPS, Convertible Bonds,
Required
- a. Based on this information compute basic and diluted earnings per share for the current year.
- b. Prepare the earnings per share disclosure on the income statement beginning with income from continuing operations.
E20-4. Computing Basic and Diluted EPS, Convertible Bonds, Preferred Stock. Stewart Stamping began the current year with 400,000 common shares outstanding and issued an additional 150,000 shares on September 1. The firm has $10,000,000, 2 5% convertible bonds outstanding for a full year (i.e., $250 000 coupon interest per year), which are convertible into 325,000 shares of common stock .The firm issued the bonds at par and did not convert any during the current year. It also had $1,150,000 par value, 3% nonconvertible, noncumulative preferred stock outstanding for the full year and declared dividends for the current year. The company is subject to a 40% effective tax rate and net income is $3,500,000. Based on this information, compute basic and diluted earnings per share for the current year.
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Presented below are selected ledger accounts of Tamarisk Corporation as of December 31, 2020.
Cash
Administrative expenses
Selling expenses
Net sales
Cost of goods sold
Cash dividends declared (2020)
Cash dividends paid (2020)
Discontinued operations (loss before income taxes)
Depreciation expense, not recorded in 2019
Retained earnings, December 31, 2019
Effective tax rate 20%
Your answer is correct.
Compute net income for 2020.
Net income
tA
$
96800
$55,000
110,000
88,000
594,000
231,000
22,000
16,500
44,000
33,000
99,000
Provided below are an analyst's forecasts of revenue, net operating profit after tax (NOPAT), and net operating assets (NOA) as of 12/31/2021 for Amgen for the period 2022 through 2025.
($ millions) Reported 2021
Revenue:
NOPAT:
NOA:
The following additional information is provided (dollar and share amounts in millions).
• Common shares outstanding: 558.300
• Net nonoperating obligations (NNO): $26,355.0
• Noncontrolling interest (NCI): $0.0
• Preferred stock: $0.0
• WACC: 6.5%
• Revenue growth in 2022-2025: 4.0%
• Terminal period growth: 2.0%
Use the information above to calculate the terminal period values of revenue, NOPAT, NOA, and ROPI. Do not round intermediate calculations. All values other than per-share amounts are shown in millions.
$ millions
Forecast Horizon Period
2025
2022 2023 2024
$25.979.0 $27,018.2 $28.098.9 $29.222.8 $30,391.8
$6.624.6 $6,889.6 $7,165.2 $7.451.8 $7,749.9
$33,055.0 $34.377.2 $35,752.3 $37,182.4 $38,669.7
Revenue:
NOPAT:
NOA:
ROPI:
Terminal Period…
SFP accounts of Sandhill Inc., which follows IFRS, follow:
Debit accounts
Cash
FV-NI investments
Accounts receivable
Merchandise inventory
Machinery
Buildings
Land
Credit accounts
Sandhill Inc.
Comparative Statement of Financial Position Accounts
December 31, 2023 and 2022
Allowance for expected credit losses
Accumulated depreciation-machinery
Accumulated depreciation-buildings
Accounts payable
Accrued liabilities
Income taxes payable
Long-term note payable-non-trade
Common shares
Retained earnings
Additional information:
1
2
3.
4.
2023
$44,900
22,660
67,390
30,430
29,400
67,420
7,500
$269,700
$1,290
5,795
13,350
29,590
2,405
910
26,300
150,000
40,060
$269,700
2022
$33,400
40,000
59,900
24,400
Sandhill's 2023 statement of income is as follows:
18,250
56,250
7,500
$239,700
$540
2,420
8,850
24,350
1,160
1,410
Sandhill has adopted the policy of classifying interest paid as operating activities and dividends paid as financing activities.
31,300
125,000
44,670
$239,700
Cash dividends…
Chapter 20 Solutions
Intermediate Accounting
Ch. 20 - Prob. 20.1QCh. 20 - Prob. 20.2QCh. 20 - If-Converted Method. Does the if-converted...Ch. 20 - Diluted EPS. If all potentially dilutive...Ch. 20 - Diluted EPS. Can diluted earnings per share on...Ch. 20 - Diluted EPS, Convertible Debt, and Preferred...Ch. 20 - Prob. 20.7QCh. 20 - Prob. 20.8QCh. 20 - Prob. 20.9QCh. 20 - EPS Disclosures. is an entity required to present...
Ch. 20 - Prob. 20.11QCh. 20 - Hutchins Company had 200,000 shares of common...Ch. 20 - Prob. 20.2MCCh. 20 - Prob. 20.3MCCh. 20 - Prob. 20.4MCCh. 20 - Refer to the information about Hutchins Company in...Ch. 20 - Prob. 20.6MCCh. 20 - Prob. 20.1BECh. 20 - Prob. 20.2BECh. 20 - Computing Income for Basic EPS. Russo Watches, Ltd...Ch. 20 - Prob. 20.4BECh. 20 - Compute Weighted-Average Number of Shares...Ch. 20 - Compute Weighted-Average Number of Shares...Ch. 20 - Prob. 20.7BECh. 20 - Prob. 20.8BECh. 20 - Prob. 20.9BECh. 20 - Prob. 20.10BECh. 20 - Prob. 20.11BECh. 20 - Computing Basic and Diluted EPS, Options. Nicks...Ch. 20 - Computing Diluted EPS, Convertible Debt. Axelon...Ch. 20 - Computing Basic and Diluted EPS, Preferred Stock....Ch. 20 - Computing Weighted-Average Number of Common Shares...Ch. 20 - Prob. 20.3ECh. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.5ECh. 20 - Computing Basic and Diluted EPS, Convertible Bonds...Ch. 20 - Computing Basic and Diluted EPS, Convertible Bonds...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Options,...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.12ECh. 20 - Prob. 20.1PCh. 20 - Prob. 20.2PCh. 20 - Computing Basic and Diluted EPS. Convertible...Ch. 20 - Prob. 20.4PCh. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.7PCh. 20 - Prob. 20.8PCh. 20 - Prob. 1JCCh. 20 - Prob. 1FSCCh. 20 - Prob. 1SSCCh. 20 - Basis for Conclusions Case 1: Antidilutive...Ch. 20 - Basis for Conclusions Case 2: Treasury Stock...
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