Question
In: Accounting
Assume that the following data relative to Kane Company for 2018 os available: Net Income 2900000...
Assume that the following data relative to Kane Company for 2018 os
available:
Net Income 2900000
Transaction in common shares change cumulative
Jan. 1 2018 Beginning number. 710000
Mar 1 2018 Purchase of treasury shares (61200) 648800
June 1 2018 stock split 2-1. 648800. 1297600
Nov 1. 2018 Issuance of shares 258000. 1555600
6% cumulative convertible preferred stock
sold at par, convertible into 180000 shares of common
(adjusted for split)
stock options
exercisable at the option price of $25 per share. Average
market price in 2018 $30 (matket price and option price adjusted
for split).
Part 1
compute weighted average shares outstanding for 2018.
weighted average shares outstanding
part 2
compute the basic earnings per share for 2018.
basic earnings per share $
part 3
compute the diluted earnings per share for 2018
diluted earnings per share $
Sold at par convertible into 180000 shares of common (adjusted for
split). $900000
Solutions
Expert Solution
Solution:
Part 1- Number of shares outstanding as on 2018
Opening balance 710000
Less: purchase of treasury shares. (61200)
648800
ADD: Splitting up of shares(2:1). 648800
1297600
Add: Issuance of shares. 258000
1555600
Add: option for convertible bonds. 180000
Less: shares if they would have been
purchased at fair value
(180000*25/30). (150000)
Total shares outstanding. 1585600
Part 2: Basic Earnings per share
Net profit before any adjustments (a). 2900000/-
No of shares outstanding before
convertible option availed. (b). 1555600 shares
Basic Earnings per share ( a/b). 1.864/-
Part- 3 : Diluted Earnings per share
Net profit as given. 2900000/-
Add: Interest on convertible bonds
900000*6% 54000/-
Less: Tax on interest ( not given). ---
Adjusted Net profit. (a) 2954000/-N
Noof shares(as calculated in part 1) (b) 1585600 shares
Diluted Earnings per share (a/b). 1.8630/-
(If tax rate is assumed at 30%, then adjusted Net profit would be 2900000+54000-30%54000= 2937800. At the same time, Diluted Earnings per share would have become 1.852/-)
ekkarill92 answered 2 years agoRelated Solutions
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,790,000...
Assume that the following data relative to Kane Company for 2018
is available:
Net Income
$2,790,000
Transactions in Common Shares
Change
Cumulative
Jan. 1, 2018, Beginning number
680,000
Mar. 1, 2018, Purchase of treasury shares
(66,600)
613,400
June 1, 2018, Stock split 2-1
613,400
1,226,800
Nov. 1, 2018, Issuance of shares
234,000
1,460,800
6% Cumulative Convertible Preferred Stock
Sold at par, convertible into 200,000 shares of common
(adjusted for split).
$1,000,000
Stock Options
Exercisable at the option price of $25...
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,800,000...
Assume that the following data relative to Kane Company for 2018
is available:
Net Income
$2,800,000
Transactions in Common Shares
Change
Cumulative
Jan. 1, 2018, Beginning number
650,000
Mar. 1, 2018, Purchase of treasury shares
(55,200)
594,800
June 1, 2018, Stock split 2-1
594,800
1,189,600
Nov. 1, 2018, Issuance of shares
216,000
1,405,600
6% Cumulative Convertible Preferred Stock
Sold at par, convertible into 190,000 shares of common
(adjusted for split).
$950,000
Stock Options
Exercisable at the option price of $25...
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,890,000...
Assume that the following data relative to Kane Company for 2018
is available:
Net Income
$2,890,000
Transactions in Common Shares
Change
Cumulative
Jan. 1, 2018, Beginning number
740,000
Mar. 1, 2018, Purchase of treasury shares
(72,000)
668,000
June 1, 2018, Stock split 2-1
668,000
1,336,000
Nov. 1, 2018, Issuance of shares
222,000
1,558,000
6% Cumulative Convertible Preferred Stock
Sold at par, convertible into 180,000 shares of common
(adjusted for split).
$900,000
Stock Options
Exercisable at the option price of $25...
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,890,000...
Assume that the following data relative to Kane Company for 2018
is available:
Net Income
$2,890,000
Transactions in Common Shares
Change
Cumulative
Jan. 1, 2018, Beginning number
720,000
Mar. 1, 2018, Purchase of treasury shares
(67,200)
652,800
June 1, 2018, Stock split 2-1
652,800
1,305,600
Nov. 1, 2018, Issuance of shares
240,000
1,545,600
6% Cumulative Convertible Preferred Stock
Sold at par, convertible into 190,000 shares of common
(adjusted for split).
$950,000
Stock Options
Exercisable at the option price of $25...
Assume that the following data relative to Kane Company for 2020 is available: Net Income &nbs
Assume that the following data relative to Kane Company for 2020
is available:
Net
Income
$2,100,000
Transactions in Common Shares
Change
Cumulative
Jan. 1, 2020, Beginning number
700,000
Mar. 1, 2020, Purchase of treasury shares
(60,000)
640,000
June 1, 2020, Stock split 2-1
640,000
1,280,000
Nov. 1, 2020, Issuance of shares
120,000
1,400,000
8% Cumulative Convertible Preferred Stock
Sold at par, convertible into 200,000 shares of common
(adjusted for split). $1,000,000
Stock Options
Exercisable at the option price...
Assume that the following data relative to Kane Company for 2015 is available: Net Income $2,800,000...
Assume that the following data relative to Kane Company for 2015
is available: Net Income $2,800,000 Jan. 1, 2015, Beginning number
of Common Shares 700,000 Transactions in Common Shares in 2015 On
April 1, the corporation purchased on the market 60,000 of its own
outstanding shares. On July 1, the corporation declared and issued
a 2-for-1 stock split. On October 1, the corporation issued 240,000
new shares to raise additional capital. The following dilutive
securities were issued prior to 2015....
Assume that the following data relative to Eddy Company for 2021 is available: Net Income for...
Assume that the following data relative to Eddy Company for 2021
is available:
Net Income for the year : $2,100,000;
On Jan.1,there are 700 ,000 shares of common shares
outstanding
transactions in common shares:
May purchase of 60,000 treasury shares
June stock split 2-1
Nov issuance of 120,000 shares
8% Cumulative Convertible Preferred Stock: $1,000,000,
convertible into 200,000 shares of common stock. (adjusted for
split)
Stock Options: exercisable to 60,000 shares of common stock at
the price of $25 per...
Assume that the following data relative to Dakota Company for 2015 is available: Net Income $2,500,000...
Assume that the following data relative to Dakota Company for
2015 is available: Net Income $2,500,000 Jan. 1, 2015, Beginning
number of Common Shares 600,000 Transactions in Common Shares in
2015 On February 1, the corporation purchased on the market 100,000
of its own outstanding shares. On May 1, the corporation declared
and issued a 2-for-1 stock split. On August 1, the corporation
issued 200,000 new shares to raise additional capital. On November
1, the corporation issued a 10% stock...
1- Assume that the following data relative to Rice Company for 2020 is available Net Income...
1- Assume that the following data relative to Rice Company for
2020 is available
Net Income $3,984,000:
Transactions in Common Shares Change Cumulative
Jan. 1,2020 Beginning number 650,000
Apr. 1,2020 Purchase of treasury shares (50,000) 600,000
June 1,2020 100% stock dividend 600,000 1,200,000
Dec 1,2020 Issuance of shares 200,000 1,400,000
5% Cumulative Preferred Stock:
$1,000,000 sold at par on January 1,2020 convertible
into 200,000 shares of common stock
Stock options:
Exercisable at the option of $30 per share. Average market price...
2 The following information is available for Barone Corporation in 2018 with Net Income of $20,250,000....
2 The following information is available for Barone Corporation
in 2018 with Net Income of $20,250,000. The company also had
Preferred Stock, 6%, $50 par value with 150,000 shares authorized
and 135,000 issued and outstanding. The full dividend was paid this
year. January 1, 2018 Shares outstanding 4,000,000 April 1, 2018
Shares issued 640,000 July 1, 2018 Treasury shares purchased
240,000 October 1, 2018 Shares issued in a 30% stock dividend
November 1, 2018 2::1 Split
Compute the basic EPS....
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Compute the cost of not taking the following cash discounts. (Use a 360-day year. Do not...
- During his project presentation, Bob falls sick and performs poorly. However, his colleague, Dan, concludes that...
- A sample human input file that contains test values that a human would enter on the...
- A solution is prepared by dissolving 15 ml of methanol in 150.0 ml water at 25...
- Consider a newlywed who is planning a wedding anniversary gift of a trip to Canada for...
- We are evaluating a project that costs $868,000, has a life of eight years, and has...
- a.) Given sample data: 61.2, 61.9, 62.8, 63.1, 64.0, 64.3, 64.9, 65.5, 66.3 and 67.9, test...
ADVERTISEMENT