P15.8B (LO 5) (Computation of Basic and Diluted EPS) The information below pertains to Payson Company for 2026. Net income for the year 6% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2026 $8,670,000 Instructions a. Compute basic earnings per share for 2026. b. Compute diluted earnings per share for 2026. 5,000,000 2,500,000 9,500,000 20% Average market price of common stock $18 per share There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 120,000 shares of common stock at $12 per share.

P15.8B (LO 5) (Computation of Basic and Diluted EPS) The information below pertains to Payson Company for 2026. Net income for the year 6% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2026 $8,670,000 Instructions a. Compute basic earnings per share for 2026. b. Compute diluted earnings per share for 2026. 5,000,000 2,500,000 9,500,000 20% Average market price of common stock $18 per share There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 120,000 shares of common stock at $12 per share.

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

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 21E: On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be...

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