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 20.9BE
To determine
To compute: The numerator of the basic EPS (Earning per share) and diluted EPS.
Given information:
$7,000,000 is net income of the current year.
$6,000,000 debt from which 5% convertible debt is issued at par.
$450,000 debt from which 6% are nonconvertible, cumulative preferred shares outstanding.
Tax rate is 40%.
Dividends are not declared for the year.
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Trendy Computer Systems reported the following shareholders' equity section as of the beginning of the current year.
Trendy Computer issues 110,000 shares of its $0.40 par common stock during the year. The market price of the shares on the date of issue was $48 per share. The company paid $85,000 in underwriting fees to issue the shares. Trendy reported $6,900,000 in net income for the year and declared and paid dividends of $6 per share at year end.
a, Prepare the entry to record the new stock issue.
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At December 31, the records of Kozmetsky Corporation provided the following selected and incomplete data:
Common stock (par $2; no changes during the current year).
Shares authorized, 5,000,000.
Shares issued, ? ; issue price $9 per share.
Shares held as treasury stock, 11,300 shares, cost $7 per share.
Net income for the current year, $441,620.
Common Stock account, $147,000.
Dividends declared and paid during the current year, $2 per share.
Retained Earnings balance, beginning of year, $770,000.
Required:
Complete the following: (Round "Earnings per share" to 2 decimal places.)
1-a. Shares issued
1-b. Shares outstanding
2. The balance in Additional Paid-in Capital would be
3. Earnings per share is
4. Total dividends paid on common stock during the current year is
5. Treasury stock should be reported in the stockholders' equity section of the balance sheet in the amount of
6. Assume that the board of directors voted a 2-for-1 stock split. After the stock split, the par value per share…
Beckham Pet Food Suppliers reported $7,300,000 net income for the current year. The company indicated that it has $6,600,000, 6% convertible debt issued at par and $550,000 par value, 8% nonconvertible, cumulative preferred shares outstanding. The firm did not declare dividends for the current year. It issued the bonds on May 31, and the preferred shares were outstanding for the entire year. Based on this information, determine the numerator of the earnings per share fraction for both basic earnings per share and diluted earnings per share. Assume that all financial instruments described are dilutive. The tax rate is 35%.
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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Earnings per share (EPS), basic and diluted; Author: Bionic Turtle;https://www.youtube.com/watch?v=i2IJTpvZmH4;License: Standard Youtube License