15A

.docx

School

Wayne State College *

*We aren’t endorsed by this school

Course

342

Subject

Finance

Date

Apr 3, 2024

Type

docx

Pages

3

Uploaded by ChancellorGazellePerson327

Report
Flagstad Inc. presented the following data. Net income $2,500,000 Preferred stock: 50,000 shares outstanding, $100 par, 8% cumulative, not convertible 5,000,000 Common stock: Shares outstanding 1/1 750,000 Issued for cash, 5/1 300,000 Acquired treasury stock for cash, 8/1 150,000 2-for-1 stock split, 10/1 Compute earnings per share. (Round answer to 2 decimal places, e.g. 2.55.) Earnings per share $ 1.18 On January 1, 2025, Crocker Company issued 10-year, $2,000,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Crocker common stock. Crocker’s net income in 2025 was $400,000, and its tax rate was 20%. The company had 100,000 shares of common stock outstanding throughout 2025. None of the bonds were converted in 2025. a. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share $ 3.82 b. Compute diluted earnings per share for 2025, assuming the same facts as above, except that $1,000,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Crocker common stock. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share $ 2.67
On June 1, 2023, Andre Company and Agassi Company merged to form Lancaster Inc. A total of 800,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2025, the company issued an additional 400,000 shares of stock for cash. All 1,200,000 shares were outstanding on December 31, 2025. Lancaster Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2025. Each $1,000 bond converts to 40 shares of common at any interest date. None of the bonds have been converted to date. Lancaster Inc. is preparing its annual report for the fiscal year ending December 31, 2025. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,540,000. (The tax rate is 20%.) Determine the following for 2025. a. The number of shares to be used for calculating: (Round answers to O decimal places, eg. 2,500.) 1 Basicearnings per share 1100000 shares 2. Diluted earnings per share 1112000 shares b. The earnings figures to be used for calculating: (Round answers to O decimal places, eg. 2,500) 1 Basic earnings per share $ 1,540,000 2. Diluted earnings per share ~ $ 1,559,200
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help