Computing EPS: Convertible Debt Shaffer Corporation issued 160, $1,000, 10% convertible bonds in the prior year at face value. Each bond is convertible into 100 shares of common stock. The company's net income for the current year is $3,648,000 ($4,864,000 before tax). Excluding the convertible bonds, average common shares outstanding for the year were 1,616,000. • Note: In the following calculations, enter the earnings per share amounts in dollars and cents, rounded to the nearest penny. a. Compute basic EPS. b. Compute diluted EPS. Net Income Available to Weighted Avg. Common Common Stockholders Shares Outstanding Basic EPS $ Diluted EPS $ 0 0 Basic EPS $ Diluted EPS $ 0$ 0$ 0 0 c. How do the answers to parts a and b change if the bonds were issued on July 1? Net Income Available to Weighted Avg. Common Common Stockholders Shares Outstanding Per Share Per Share 0$ 0$ 0 0 0 0

Computing EPS: Convertible Debt Shaffer Corporation issued 160, $1,000, 10% convertible bonds in the prior year at face value. Each bond is convertible into 100 shares of common stock. The company's net income for the current year is $3,648,000 ($4,864,000 before tax). Excluding the convertible bonds, average common shares outstanding for the year were 1,616,000. • Note: In the following calculations, enter the earnings per share amounts in dollars and cents, rounded to the nearest penny. a. Compute basic EPS. b. Compute diluted EPS. Net Income Available to Weighted Avg. Common Common Stockholders Shares Outstanding Basic EPS $ Diluted EPS $ 0 0 Basic EPS $ Diluted EPS $ 0$ 0$ 0 0 c. How do the answers to parts a and b change if the bonds were issued on July 1? Net Income Available to Weighted Avg. Common Common Stockholders Shares Outstanding Per Share Per Share 0$ 0$ 0 0 0 0

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 11QE

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