During 2020, Masefield, Inc. had the following convertible securities outstanding: • $200,000 of 6% convertible bonds. Each $1,000 bond is convertible into 30 shares of common stock. • $100,000 of 10%, $50 par, cumulative preferred stock. Each share is convertible into 4 shares of common stock. Masefield, Inc. has an income tax rate of 30%. Its reported net income for 2020 was $210,000, and it had 26,000 shares of common stock outstanding all year. Instructions: Calculate basic and diluted earnings per share for Masefield. You may omit ranking and impact of the dilutive securities.

During 2020, Masefield, Inc. had the following convertible securities outstanding: • $200,000 of 6% convertible bonds. Each $1,000 bond is convertible into 30 shares of common stock. • $100,000 of 10%, $50 par, cumulative preferred stock. Each share is convertible into 4 shares of common stock. Masefield, Inc. has an income tax rate of 30%. Its reported net income for 2020 was $210,000, and it had 26,000 shares of common stock outstanding all year. Instructions: Calculate basic and diluted earnings per share for Masefield. You may omit ranking and impact of the dilutive securities.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 26E: Tama Companys capital structure consists of common stock and convertible bonds. At the beginning of...

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Tama Companys capital structure consists of common stock and convertible bonds. At the beginning of 2019, Tama had 15,000 shares of common stock outstanding; an additional 4,500 shares were issued on May 4. The 7% convertible bonds have a face value of 80,000 and were issued in 2016 at par. Each 1,000 bond is convertible into 25 shares of common stock; to date, none of the bonds have been converted. During 2019, the company earned net income of 79,200 and was subject to an income tax rate of 30%. Required: Compute the 2019 diluted earnings per share.
Frost Company has accumulated the following information relevant to its 2019 earningsper share. 1. Net income for 2019: 150,500. 2. Bonds payable: On January 1, 2019, the company had issued 10%, 200,000 bonds at 110. The premium is being amortized in the amount of 1,000 per year. Each 1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted. 3. Bonds payable: On December 31, 2017, the company had issued 540,000 of 5.8% bonds at par. Each 1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds have been converted. 4. Preferred stock: On July 3, 2018, the company had issued 3,800 shares of 7.5%, 100 par, preferred stock at 108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid. 5. Common stock: At the beginning of 2019, 25,000 shares were outstanding. On August 3, 7,000 additional shares were issued. During September, a 20% stock dividend was declared and issued. On November 30, 2,000 shares were reacquired as treasury stock. 6. Compensatory share options: Options to acquire common stock at a price of 33 per share were outstanding during all of 2019. Currently, 4,000 shares may be acquired. To date, no options have been exercised. The unrecognized compens Frost Company has accumulated the following information relevant to its 2019 earnings ns is 5 per share. 7. Miscellaneous: Stock market prices on common stock averaged 41 per share during 2019, and the 2019 ending stock market price was 40 per share. The corporate income tax rate is 30%. Required: 1. Compute the basic earnings per share. Show supporting calculations. 2. Compute the diluted earnings per share. Show supporting calculations. 3. Indicate which earnings per share figure(s) Frost would report on its 2019 income statement.
Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.
On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
Hyde Corporations capital structure at December 31, 2018, was as follows: On July 2, 2019, Hyde issued a 10% stock dividend on its common stock and paid a cash dividend of 2.00 per share on its preferred stock. Net income for the year ended December 31, 2019, was 780,000. What should be Hydes 2019 basic earnings per share? a. 7.80 b. 7.09 c. 7.68 d. 6.73
On January 1, 2020, a company issued 10-year, $330,000 face value, 7% bonds, at par. Each $1,000 bond is convertible into 11 shares of common stock. The company’s net income in the year was $460,000, and its tax rate was 24%. The company had 100,000 shares of common stock outstanding throughout 2020. What is the numerator for computing diluted earnings per share for 2020?
During 2020, ABC Co. had net income of $900,000. The company has 20,000 shares of 5%, $100 par, convertible preferred stock outstanding, and 1,500, 10% convertible bonds outstanding, which were issued at par. The preferred shares and the convertible bonds were issued in 2017. Each share of convertible preferred stock is convertible into 5 shares of common stock. Each bond is convertible into 90 shares of common stock. The company has a tax rate of 21% and a weighted average shares outstanding of 800,000 throughout 2020. Instructions: Compute Basic EPS for 2020 Compute Diluted EPS for 2020 Please type your answers in the text-box below. Please show your work using the EPS formula equations.
On January 1, 2020, Ayayai Company issued 10-year, $2,140,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 14 shares of Ayayai common stock. Ayayai’s net income in 2020 was $482,300, and its tax rate was 20%. The company had 91,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $enter diluted earnings per share rounded to 2 decimal places (b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $910,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Ayayai common stock. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $enter diluted earnings per share rounded to 2 decimal places
On January 1, 2020, Sarasota Company issued 10-year, $1.810.000 face value, 6% bonds, at par. Each $1.000 bond is convertible into 15 shares of Sarasota common stock. Sarasota's net income in 2020 was $403,200, and its tax rate was 20%. The company had 96,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. (a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal ploces, eg $255) Diluted earnings per share s
On January 1, 2020, Sage Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Sage common stock. Sage's net income in 2020 was $403,200, and its tax rate was 20%. The company had 96,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. (a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share 3.98 (b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $960,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Sage common stock. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $ 3.82
On January 1, 2020, Sarasota Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Sarasota common stock. Sarasota's net income in 2020 was $403,200, and its tax rate was 20%. The company had 96,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. (a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $ (b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $960,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Sarasota common stock. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $
Fortuner Company had 200,000 ordinary shares outstanding on January 1, 2021. On January 1, 2021, the entity issued 4,000 convertible 10% bonds with P1,000 face value. The bonds were converted on October 1, 2021 and 40 ordinary shares were issued in exchange for each bond. Net income was P5,000,000. The income tax rate is 30%. What is the amount of basic earnings per share? 25.00 13.80 20.83 15.62 What is the amount of diluted earnings per share? 14.47 21.65 14.72 14.61