Wildhorse Corporation reported net income of $517,000 in 2023 and had 650,000 common shares outstanding throughout the year. On May 1, 2023, Wildhorse issued 5% convertible bonds. Each $1,000 bond is convertible into 120 common shares. Total proceeds at par amounted to $940,000 and were allocated to the liability and equity components under the residual value method. The liability component was measured first, at the present value of the stream of interest payments plus the present value of the bond maturity value, all discounted at 8% (the interest rate that applies to similar straight bonds). At the time of issuance, the liability component was recorded at $867,000. Wildhorse's tax rate is 30%. Calculate Wildhorse's 2023 diluted earnings per share. (Round answer to 2 decimal places, e.g. 15.25.) Diluted earnings per share $
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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.An entity provided the following information on December 31, 2020: Accounts payable amounted P1,500,000 On December 15, 2020, the entity declared a cash dividend of P20 per share on 100,000 outstanding shares, payable on January 15, 2021 On July 1, 2020, the entity issued P5,000,000, 8% bonds for P4,400,000 to yield 10%. The bonds mature on June 30, 2025 and pay interest annually every June 30. The pretax financial income was P8,500,000 and taxable income was P6,000,000. The difference is due to P1,000,000 permanent difference and P1,500,000 taxable temporary difference to reverse 2021. The income tax rate is 30%. The entity made estimated income tax payments during the current year of P1,000,000. What amount should be reported as total current liabilities on December 31, 2020? 3,700,000 5,500,000 4,700,000 4,500,000 An entity reported the following data on December 31, 2020: Cash in bank, net of bank overdraft of P100,000 1,200,000 Petty cash,…
- Cullumber Corporation reported net income of $328,000 in 2023 and had 945,000 common shares outstanding throughout the year. On May 1, 2023, Cullumber issued 5% convertible bonds. Each $1,000 bond is convertible into 120 common shares. Total proceeds at par amounted to $900,000 and were allocated to the liability and equity components under the residual value method. The liability component was measured first, at the present value of the stream of interest payments plus the present value of the bond maturity value, all discounted at 8% (the interest rate that applies to similar straight bonds). At the time of issuance, the liability component was recorded at $822,000. Cullumber's tax rate is 30%. Calculate Cullumber's 2023 diluted earnings per share. (Round answer to 2 decimal places, e.g. 15.25.) Earnings per share $Carla Vista Corporation had net income of $42,000 for the year ended December 31, 2023, and weighted average number of common shares outstanding of 10,000. The following information is provided regarding the capital structure: 1. 2. (a1) (a2) 8% convertible debt, 210 bonds each convertible into 43 common shares. The bonds were outstanding for the entire year. The income tax rate is 35%. The bonds were issued at par ($1,150 per bond). No bonds were converted during the year. 3% convertible, cumulative $100 preferred shares, 1,000 shares issued and outstanding. Each preferred share is convertible into 2 common shares. The preferred shares were issued at par and were outstanding the entire year. No shares were converted during the year. Calculate the basic earnings per share for 2023. (Round answer to 2 decimal places, e.g. 15.25.) Basic earnings per share eTextbook and MediaGrocery Corporation received $300,328 for 11 percent bonds issued on January 1, 2021, at a market interest rate of 8 percent. The bonds had a total face value of $250,000, stated that interest would be paid each December 31, and stated that they mature in 10 years. Required: Complete the following table for each account by indicating: (a) whether it is reported on the Balance Sheet (B/S) or Income Statement (I/S); (b) the dollar amount by which the account increases (+), decreases (−), or does not change (0) when Grocery Corporation issues the bonds; and (c) the direction of change in the account [increase (+), decrease (−), or no change (NC)] when Grocery Corporation records the interest payment on December 31.
- MHB Ltd. sold $6,740,000 of 12% bonds, which were dated March 1, 2023, on June 1, 2023. The bonds paid interest on September 1 and March 1 of each year. The bonds' maturity date was March 1, 2033, and the bonds were issued to yield 14%. MHB's fiscal year-end was February 28, and the company followed IFRS. On June 1, 2024, MHB bought back $2,740,000 worth of bonds for $2,640,000 plus accrued interest. (a) Your answer is partially correct. Using 1. a financial calculator, or 2. Excel function PV, calculate the issue price of the bonds and prepare the entry for the issuance of the bonds. Hint: Use the account Interest Expense in your entry). (Round answer to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Cash Interest Expense Bonds…An entity provided the following information on December 31, 2020: · Accounts payable amounted P1,500,000 · On December 15, 2020, the entity declared a cash dividend of P20 per share on 100,000 outstanding shares, payable on January 15, 2021 · On July 1, 2020, the entity issued P5,000,000, 8% bonds for P4,400,000 to yield 10%. The bonds mature on June 30, 2025 and pay interest annually every June 30. · The pretax financial income was P8,500,000 and taxable income was P6,000,000. The difference is due to P1,000,000 permanent difference and P1,500,000 taxable temporary difference to reverse 2021. The income tax rate is 30%. The entity made estimated income tax payments during the current year of P1,000,000. What amount should be reported as total current liabilities on December 31, 2020?On January 1, Cee Company's ordinary share capital amounted to P1,000,000, with P10 par value. On April 1, 2019, the entity issued P5,000,000, 10% bonds with a face value of P1,000. The bonds were converted on October 1, 2019 and 20 ordinary shares were issued in exchange for each bond. Net income was P10,000,000. The income tax rate is 30%. Requirement: 1. What is the amount of basic earnings per share? 2. What is is the amount of diluted earnings per share?
- Grocery Corporation received $330,654 for 9.50 percent bonds issued on January 1, 2021, at a market interest rate of 6.50 percent. The bonds had a total face value of $272,000, stated that interest would be paid each December 31, and stated that they mature in 10 years. Required: Prepare the following table for each account by indicating (a) whether it is reported on the Balance Sheet (B/S) or Income Statement (I/S): (b) the dollar amount by which the account increases, decreases, or does not change when Grocery Corporation issues the bonds; and (c) the direction of change in the account [increase, decrease, or no change] when Grocery Corporation records the Interest payment on December 31. Account Bonds Payable Discount on Bonds Payable Interest Expense Premium on Bonds Payable (a) Financial Statement (b) Issuance (c) Interest PaidOn January 1, Jim Shorts Corporation issued bonds for $580 million. This bond issue was originally issued at premium. During the same year, $1,500,000 of the bond premium was amortized. On a statement of cash flows prepared using the indirect method, Jim Shorts Corporation should report: O that $1.5 million to be added to net income O An investing activity of $580 million. O A financing activity of $300 million. O that $1.5 million to be deducted from net incomeThe following are two independent situations. 1. Sandhill Corporation redeemed $130,500 face value, 10% bonds on June 30, 2020, at 105. The carrying value of the bonds at the redemption date was $117,000. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. 2. Tastove Inc. redeemed $161,000 face value, 18.00% bonds on June 30, 2020, at 97. The carrying value of the bonds at the redemption date was $164,000. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. For each independent situation above, prepare the appropriate journal entry for the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 2.