Question
In: Accounting
Spartan Co. has the following selected securities outstanding all year: Preferred stock, cumulative, 5%, $100 par,...
Spartan Co. has the following selected securities outstanding all year:
Preferred stock, cumulative, 5%, $100 par, 3,000 shares
Common stock, $1 par, 18,000 shares
Bonds payable, $80,000 value, 7%, convertible into 2,000 shares of common stock
Net income for the year is $79,200; the income tax rate is 30%.
What is Spartan Co.'s diluted EPS, rounded.?
Question 1 options:
|
A. |
$3.49 |
|
B. |
Bonds are antidilutive |
|
C, |
$3.01 |
|
D. |
$3.41 |
Solutions
Expert Solution
Answer is D. $3.41
| Ref | Particulars | Basic EPS | Diluted EPS |
| A | Net income for the year | $79,200.00 | $79,200.00 |
| B |
Less: Preference dividend (300000*5%) |
$15,000.00 | $15,000.00 |
| C | Net income available to common stock holders(A-B) | $64,200.00 | $64,200.00 |
| D | Add:After tax cost of interest (80,000*0.07*(1-0.30)) | $0.00 | $3,920.00 |
| E | Numerator (C=D) | $64,200.00 | $68,120.00 |
| F | Weighted average number of common shares outstanding | 18,000 | 18,000 |
| G | Additional shares issued if debt converted | - | 2,000 |
| H | Denominator (F+G) | 18,000 | 20,000 |
| I | EPS (E/H) | $3.57 | $3.41 |
ekkarill92 answered 2 years agoRelated Solutions
Sturdley Corporation has 20,000 shares of $100 par value, 7% cumulative preferred stock outstanding and 100,000...
Sturdley Corporation has 20,000 shares of $100 par value, 7%
cumulative preferred stock outstanding and 100,000 of its $1 par
value common stock outstanding. In their first four years of
operation they paid the following cash dividends:
2016 -0-
2017 $240,000
2018 $280,000
2019 $180,000
Determine the total cash dividends paid during the four years
with preferred stock as cumulative and then calculate it again with
the preferred stock as non-cumulative.
Sweet Company’s outstanding stock consists of 1,300 shares of cumulative 5% preferred stock with a $100...
Sweet Company’s outstanding stock consists of 1,300 shares of
cumulative 5% preferred stock with a $100 par value and 10,300
shares of common stock with a $10 par value. During the first three
years of operation, the corporation declared and paid the following
total cash dividends.
Dividends Declared & Paid
Year 1
$
2,300
Year 2
$
6,300
Year 3
$
33,500
The total amount of dividends paid to preferred and common
shareholders over the three-year period is:
Sweet Company’s outstanding stock consists of 1,900 shares of cumulative 5% preferred stock with a $100...
Sweet Company’s outstanding stock consists of 1,900 shares of
cumulative 5% preferred stock with a $100 par value and 10,900
shares of common stock with a $10 par value. During the first three
years of operation, the corporation declared and paid the following
total cash dividends.
Dividends Declared & Paid
Year 1
$
2,900
Year 2
$
6,900
Year 3
$
36,500
The total amount of dividends paid to preferred and common
shareholders over the three-year period is:
Multiple Choice...
The following information pertains to Parsons Co.: Preferred stock, cumulative: Par value per share $100 Dividend...
The following information pertains to Parsons Co.:
Preferred stock, cumulative:
Par value per share $100
Dividend rate 8%
Shares outstanding 10,000
Dividends in arrears none
Common stock:
Par value per share $10
Shares issued 125,000
Dividends paid per share $2.10
Market price per share $47.50
Additional paid-in capital $510,000
Unappropriated retained earnings (after closing) $270,000
Retained earnings appropriated for contingencies $310,000
Common treasury stock:
Number of shares 10,000
Total cost $240,000
Net income $616,000
.
Compute (assume no changes in...
Shiner, Inc. has 20,000 shares of 5%, $12 Par Cumulative Preferred stock outstanding and 68,000 shares...
Shiner, Inc. has 20,000 shares of 5%, $12 Par Cumulative
Preferred stock outstanding and 68,000 shares of $1 Par Common
Stock Outstanding. During 2020 & 2021, Shiner paid no
dividends. In 2022 Shiner paid $26,500 in total dividends. Which of
the following is correct?
Multiple Choice
In 2022, Preferred stockholders received $12,000 and Common
stockholders received $14,500.
In 2022, Preferred stockholders received $24,000 and Common
stockholders received $2,500.
In 2022, Preferred stockholders received $36,000 and Common
stockholders received $0.
In...
Mendez Corporation has 10,000 shares of its $100 par value, 7 percent cumulative preferred stock outstanding...
Mendez Corporation has 10,000 shares of its $100 par value, 7
percent cumulative
preferred stock outstanding and 50,000 shares of its $1 par
value common stock outstanding.
In Mendez’s first four years of operation, its board of
directors paid the following
cash dividends: 2011, none; 2012, $120,000; 2013, $140,000;
2014, $140,000.
Determine the dividends per share and total cash dividends paid
to the preferred and
common stockholders during each of the four years.
Anders, Inc., has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 40,000 shares...
Anders, Inc., has 10,000 shares of 5%, $100 par value,
cumulative preferred stock and 40,000 shares of $1 par value common
stock outstanding on December 31, 2018. There were no dividends
declared in 2016. The board of directors declares and pays
dividends of $90,000 each in 2017 and in 2018. What is the
dividends per share received by the common stockholders in
2018?
Group of answer choices
$1.00
$1.25
$0.75
$1.75
Anders, Inc., has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 40,000 shares...
Anders, Inc., has 10,000 shares of 5%, $100 par value,
cumulative preferred stock and 40,000 shares of $1 par value common
stock outstanding on December 31, 2018. There were no dividends
declared in 2016. The board of directors declares and pays
dividends of $90,000 each in 2017 and in 2018. What is the
dividends per share received by the common stockholders in
2018?
Group of answer choices
$1.00
$1.25
$0.75
$1.75
Pharoah company has 6500 shares of 5%, $100 par value, cumulative preferred stock and 13000 shares...
Pharoah company has 6500 shares of 5%, $100 par value,
cumulative preferred stock and 13000 shares of $1 par value common
stock outstanding in december 31,2020. There were no dividends
declared in 2018. The board of directors declares and pays a $61100
dividend in 2019 and in 2020. what is the amoun of dividends
recieved by the common stock holders in 2020.
The Barney company has outstanding stock as follows: 10% preferred stock 10,000 shares $10 par cumulative...
The Barney company has outstanding stock as follows:
10% preferred stock 10,000 shares $10 par cumulative and
participating
Common stock 60,000 shares $5 par
The preferred stock is permitted to participate after common
receives $1 per share. The participation is on a total par
relationship. There are no arrears going into the first year.
Prepare a dividend allocation schedule including a participation
schedule showing total dollars and per share calculations assuming
the following dividends are declared.
Year 1 $0
Year...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- [Big Data concept] (10) Give one example of Big Data application you know. Use the detailed...
- Write a program of Binary Search in C++ by using function and arrays with the explanation.
- Consider three jobs you know well, and explain the personality traits necessary for each job using...
- Steven has learned how stress affects his physical health, so now he is trying to reduce...
- You manage a risky portfolio with expected rate of return of 12% and a standard deviation...
- 1) a. Write down a C++ program which will create a list (simple linear linked list)...
- What is the difference between cross-site scripting (XSS) attack and cross-site request forgery (XSRF) attack?
ADVERTISEMENT