Part-a:
a. Computation of Earning per share |
Computation of Earning Available for Common Stockholder | |
Net Income | $1,180,000 |
Less: Preferred Dividend (3,820,000 x 6%) | ($229,200) |
Earning available for common shareholders | $950,800 |
Number of shares outstanding ( 5850000/$10) | 585000 |
Earning per Share= Earning available for Common Shareholder/ No. of shares outstanding |
EPS =$950800/585000 shares= $1.63 per Share |
b. Computation diluted Earning per share |
Computation of Adjusted Net Income | |
Net Income | $1,180,000 |
Less: Preferred Dividend (3,820,000 x 6%) | ($229,200) |
Interest savings (net of tax) (1910,000 x 7% x (1-40%)) | ($80,220) |
Adjusted Net Income | $870,580 |
Computation ofAdjusted Outstanding shares | |
Average common shares | 585,000 |
Number of shares under warrant ($25 -$20)/$25 ) x 69,200 shares | 13,840 |
Number of Common shares to be issued in lieu of conversion of bonds ($1910,000 /$1,000) X 30 shares/bond | 57,300 |
Total Shares Outstanding | 656,140 |
Diluted EPS= Adjuested Net Income/ Adjusted Outstnading Shares |
=870580/656140=$1.33per share |
The information below pertains to Flint Company for 2018. $1,180,000 1,910,000 Net income for the year...
The information below pertains to Cheyenne Company for 2021. $1,140,000 2,010,000 Net income for the year 6% 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 2021 Average market price of common stock 3,820,000 5,820,000 20% $25 per share There were no changes during 2021...
The information below pertains to Sheffield Company for 2018. Net income for the year $1,230,000 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 1,990,000 7% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,110,000 Common stock, $10 par value 6,270,000 Tax rate for 2018 40% Average market price of common stock $25 per share There were no changes during...
The information below pertains to Cheyenne Company for 2021. $1,140,000 2,010,000 Net income for the year 6% 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 2021 Average market price of common stock 3,820,000 5,820,000 20% $25 per share There were no changes during 2021...
Problem 16-8 The information below pertains to Sheridan Company for 2018 Net income for the year $1,190,000 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 1,970,000 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,000,000 Common stock, $10 par value 6,280,000 Tax rate for 2018 40% Average market price of common stock $25 per share There were no changes...
Problem 16-8 The information below pertains to Indigo Company for 2018. $1,140,000 1,900,000 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 2018 Average market price of common stock 3,870,000 5,700,000 40% $25 per share There were no changes...
The information below pertains to Windsor Company for 2021. Net income for the year $1,190,000 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 1,970,000 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,000,000 Common stock, $10 par value 6,280,000 Tax rate for 2021 20% Average market price of common stock $25 per share There were no changes during...
The information below pertains to Sarasota Company for
2021.
Net income for the year
$1,220,000
7% convertible bonds issued
at par ($1,000 per bond); each bond is convertible into
30 shares of common stock
1,990,000
6% convertible, cumulative
preferred stock, $100 par value; each share is convertible
into 3 shares of common stock
3,990,000
Common stock, $10 par
value
6,140,000
Tax rate for 2021
20%
Average market price of
common stock
$25 per share
There were no changes during...
The information below pertains to Stellar Company for
2021.
Net income for the year
$1,250,000
7% convertible bonds issued at par ($1,000 per bond); each bond
is convertible into
30 shares of common stock
2,080,000
6% convertible, cumulative preferred stock, $100 par value;
each share is convertible
into 3 shares of common stock
3,800,000
Common stock, $10 par value
5,770,000
Tax rate for 2021
20%
Average market price of common stock
$25 per share
There were no changes during...
The information below pertains to Johnson Company for
2021.
Net income for the year
$1,230,000
8% convertible bonds issued at par ($1,000 per bond); each bond
is convertible into
30 shares of common stock
2,090,000
6% convertible, cumulative preferred stock, $100 par value;
each share is convertible
into 3 shares of common stock
3,830,000
Common stock, $10 par value
6,110,000
Tax rate for 2021
20%
Average market price of common stock
$25 per share
There were no changes during...
The information below pertains to Bonita Company for 2021. Net income for the year $1,190,000 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 1,970,000 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,000,000 Common stock, $10 par value 6,280,000 Tax rate for 2021 20% Average market price of common stock $25 per share There were no changes during...