Question

ley PLUS levDIII Kiese, Intermediate Accounting, 12CE, Volume 2 Help System Announcements PRINTER VERSION BACK NEX Exercise 17-9 (Part Level Submission) HUNT RCES Lab 5 Exercise 17-5 Exercise 17-3 Exercise 17-4 rise 17-1 rose 17-4 (Part In 2019, Carla Vista Ltd. issued $50,000 of 9% bonds at par, with each $1,000 bond being convertible into 100 common shares. The company had revenues of $70,400 and expenses of $16,400 for 2020, not including interest and taxes (assume a tax rate of 20%). Throughout 2020, 1,800 common shares were outstanding, and none of the bonds were converted or redeemed. For simplicity, assume that the convertible bonds equity element is not recorded.) Your answer is correct. erose 17-9 Pare El Submission Ercise 17-16 Part el mission Calculate diluted earnings per share for the year ended December 31, 2020. (Round answer to 2 decimal places, c.9. 15.25.) W SCORE ew Results by Obiective Diluted earnings per share se SHOW SOLUTION SHOW ANSWER LINK TO FEX Attempts: 2 of 3 used (b) Your answer is correct. Assume that the 50 bonds were issued on October 1, 2020 (rather than in 2019), and that none have been converted or redeemed. Calculate diluted eaminos per share for the year ended December 31, 2020. (Round answer to z decimal places, .0.15.25.) P ENGAM

Answer 1

A	CALCULATION OF DILULATED EARNING
	REVENUE		70,400
	EXPENSES		36,400
	PROFIT BEFORE TAX		34,000
	TAX	=34400 X 20/100	6,800
	EARNING AFTER TAX		27,200
	NO. OF COMMAN SHARE
	OLD	1,800
	NOT CONVERTED	=50000*100/1000    =                           5,000	6,800
			4.00
	FOR CALCULATION OF DILUATED EARNING BONDS WILL BE CONVERTED INTO COMMON STOCK/SHARE
B	CALCULATION OF DILULATED EARNING
	REVENUE		70,400
	EXPENSES		36,400
	PROFIT BEFORE TAX		34,000
	TAX	=34400 X 20/100	6,800
	EARNING AFTER TAX		27,200
	NO. OF COMMAN SHARE
	OLD	1,800
	NOT CONVERTED	=50000 X 100/1000 X3/12   =             1,250	3,050
			8.92
	FOR CALCULATION OF DILUATED EARNING BONDS WILL BE CONVERTED INTO COMMON STOCK/SHARE
	BONDS ISSUED IN THE MONTH OF OCTOBER 2020, SO FOR DILUATION IT WILL BE CONVERTED ONLY FOR 3 MONTHS
C	CALCULATION OF DILULATED EARNING
	REVENUE		70,400
	EXPENSES		36,400
	PROFIT BEFORE TAX		34,000
	TAX	=34400 X 20/100	6,800
	EARNING AFTER TAX		27,200
	NO. OF COMMAN SHARE
	OLD	1,800
	CONVERTED ON 1 JULY 2020	=50000 X 10/50 =                                   1,000
	NOT CONVERTED	=50000 X 40/50   =                                 4,000	6,800
			4.00
	FOR CALCULATION OF DILUATED EARNING BONDS WILL BE CONVERTED INTO COMMON STOCK/SHARE
	10 BONDS CONVERTED IN THE MONTH OF JULY 2020 INTO COMMON SHARES