On June 1, 2018, Martinez Company and Sandhill Company merged to
form Teal Inc. A total of 830,000 shares were issued to complete
the merger. The new corporation reports on a calendar-year
basis.
On April 1, 2020, the company issued an additional 643,000 shares
of stock for cash. All 1,473,000 shares were outstanding on
December 31, 2020.
Teal Inc. also issued $600,000 of 20-year, 8% convertible bonds at
par on July 1, 2020. Each $1,000 bond converts to 42 shares of
common at any interest date. None of the bonds have been converted
to date.
Teal Inc. is preparing its annual report for the fiscal year ending
December 31, 2020. The annual report will show earnings per share
figures based upon a reported after-tax net income of $1,555,000.
(The tax rate is 20%.)
Determine the following for 2020.
(a) The number of shares to be used for
calculating: (Round answers to 0 decimal places, e.g.
$2,500.)
(1) |
Basic earnings per share |
enter a number of shares rounded to 0 decimal places |
shares | |||
---|---|---|---|---|---|---|
(2) |
Diluted earnings per share |
enter a number of shares rounded to 0 decimal places |
shares |
(b) The earnings figures to be used for
calculating: (Round answers to 0 decimal places, e.g.
$2,500.)
(1) |
Basic earnings per share |
$enter a dollar amount rounded to 0 decimal places |
||
---|---|---|---|---|
(2) |
Diluted earnings per share |
$enter a dollar amount rounded to 0 decimal places |
Basic Earning per share | (Net
income−Dividends on preferred stock)/Average outstanding
shares |
1555000/1473000 | 1.055669 | ||
Diluted EPS | (Net
income−Dividends on preferred stock)/(Average outstanding
shares+Diluted Shares) |
1.037912 | |||
1 |
Basic earnings per share | 1473000 | shares | ||
2 | Diluted earnings per share | 25200 | shares | ||
1 | Basic earnings per share | $1555000 | |||
2 | Diluted earnings per share | $1555000 |
On June 1, 2018, Martinez Company and Sandhill Company merged to form Teal Inc. A total...
On June 1, 2018, Pearl Company and Martinez Company merged to form Sandhill Inc. A total of 830,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 643,000 shares of stock for cash. All 1,473,000 shares were outstanding on December 31, 2020. Sandhill Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 42 shares...
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