Homework Answers
a)
No of shares for calculating Basic Earnings per share
| Dates | Shares | Weight | Weighted shares |
| Jan 1, 2017 to April 1, 2017 | 876000 | 3/12 | 219000 |
| April 1,2017 to Dec 31,2017 | 1513000 | 9/12 | 1134750 |
| No of shares for calculating Basic Earnings per share | 1353750 | ||
No of shares for calculating Diluted Earnings per share
| Dates | Shares | Weight | Weighted shares |
| Jan 1, 2017 to April 1, 2017 | 876000 | 3/12 | 219000 |
| April 1,2017 to July 1,2017 | 1513000 | 3/12 | 378250 |
| July 1,2017 to Dec 31,2017 | 1539400 | 6/12 | 769700 |
| (600000*44/1000)* | |||
| No of shares for calculating Diluted Earnings per share | 1366950 | ||
| * 26400 additional shares if bonds are converted | |||
b) Earnings figure to be used
Basic Earnings per share = $1,491,000
Diluted Earnings per share
| Net income | 1491000 | |
| Interest savings | 24000 | (600000*8%*1/2 year) |
| Additional Tax | 9600 | (24000*40%) |
| Adjusted Net income | 1505400 |
Therefore Earnings figure to be used for Diluted = $1,505,400
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of stock for cash. All 1,413,000 shares were outstanding on
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form Teal Inc. A total of 733,000 shares were issued to complete
the merger. The new corporation reports on a calendar-year
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of stock for cash. All 1,310,000 shares were outstanding on
December 31, 2020.
Teal Inc. also issued $600,000 of 20-year, 8% convertible bonds at
par on July 1, 2020. Each $1,000 bond converts to...
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Exercise 16-23
On June 1, 2018, Crane Company and Cheyenne Company merged to
form Ayayai Inc. A total of 870,000 shares were issued to complete
the merger. The new corporation reports on a calendar-year
basis.
On April 1, 2020, the company issued an additional 543,000 shares
of stock for cash. All 1,413,000 shares were outstanding on
December 31, 2020.
Ayayai Inc. also issued $600,000 of 20-year, 8% convertible bonds
at par on July 1, 2020. Each $1,000 bond converts to...
On June 1, 2018, Marin Company and Headland Company merged to form Sage Inc. A total of 731,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 541,000 shares of stock for cash. All 1,272,000 shares were outstanding on December 31, 2020. Sage Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 40 shares...
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