Ashante Sports Collections Ltd. (ASCL) ended 20X5 with 820,000 common shares outstanding, after issuing 240,000 common shares for cash on 31 December. The tax rate is 40%. There were no other common share transactions during the period. Net earnings were $1,360,000. The following elements are part of ASCL's capital structure: a. ASCL had $5,600,000 (par value) of 6% bonds payable outstanding during the year. The bonds are convertible into 80 common shares for each $1,000 bond. Bond interest expense was $409,000 for the year. b. ASCL had 46,000 options outstanding throughout 20X5 to purchase 180,000 common shares for $9 per share. The average share price during the year was $21. The options were not exercisable until 20x10. c. ASCL had 76,000, $1.85 preferred shares outstanding. The shares were cumulative. No dividends were declared in 20X6. The shares were convertible into 56,000 common shares. d. ASCL had a contingent share agreement outstanding to issue 56,000 common shares to the prior shareholders of a company that ASCL had acquired in 20X2. The shares become issuable if the acquired company's operations accumulate $5,600,000 of post- acquisition earnings before the end of 20X8. Earnings have been $3,560,000, to date, and the target is expected to be met in 20X7. e. ASCL had $8,600,000 (par value) of 5% bonds payable, issued on 31 March 20X5. The bonds are convertible into 40 common shares for each $1,000 bond. Bond interest expense was $288,750 for the 9 months of the year that the bond was outstanding.
Ashante Sports Collections Ltd. (ASCL) ended 20X5 with 820,000 common shares outstanding, after issuing 240,000 common shares for cash on 31 December. The tax rate is 40%. There were no other common share transactions during the period. Net earnings were $1,360,000. The following elements are part of ASCL's capital structure: a. ASCL had $5,600,000 (par value) of 6% bonds payable outstanding during the year. The bonds are convertible into 80 common shares for each $1,000 bond. Bond interest expense was $409,000 for the year. b. ASCL had 46,000 options outstanding throughout 20X5 to purchase 180,000 common shares for $9 per share. The average share price during the year was $21. The options were not exercisable until 20x10. c. ASCL had 76,000, $1.85 preferred shares outstanding. The shares were cumulative. No dividends were declared in 20X6. The shares were convertible into 56,000 common shares. d. ASCL had a contingent share agreement outstanding to issue 56,000 common shares to the prior shareholders of a company that ASCL had acquired in 20X2. The shares become issuable if the acquired company's operations accumulate $5,600,000 of post- acquisition earnings before the end of 20X8. Earnings have been $3,560,000, to date, and the target is expected to be met in 20X7. e. ASCL had $8,600,000 (par value) of 5% bonds payable, issued on 31 March 20X5. The bonds are convertible into 40 common shares for each $1,000 bond. Bond interest expense was $288,750 for the 9 months of the year that the bond was outstanding.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 12RE: Given the following year-end information, compute Greenwood Corporations basic and diluted earnings...
Related questions
Question
Hh.155.
Transcribed Image Text:Ashante Sports Collections Ltd. (ASCL) ended 20X5 with 820,000 common shares outstanding, after issuing 240,000 common shares
for cash on 31 December. The tax rate is 40%. There were no other common share transactions during the period. Net earnings were
$1,360,000. The following elements are part of ASCL's capital structure:
a. ASCL had $5,600,000 (par value) of 6% bonds payable outstanding during the year. The bonds are convertible into 80 common
shares for each $1,000 bond. Bond interest expense was $409,000 for the year.
b. ASCL had 46,000 options outstanding throughout 20X5 to purchase 180,000 common shares for $9 per share. The average share
price during the year was $21. The options were not exercisable until 20X10.
c. ASCL had 76,000, $1.85 preferred shares outstanding. The shares were cumulative. No dividends were declared in 20X6. The
shares were convertible into 56,000 common shares.
d. ASCL had a contingent share agreement outstanding to issue 56,000 common shares to the prior shareholders of a company that
ASCL had acquired in 20X2. The shares become issuable if the acquired company's operations accumulate $5,600,000 of post-
acquisition earnings before the end of 20X8. Earnings have been $3,560,000, to date, and the target is expected to be met in
20X7.
e. ASCL had $8,600,000 (par value) of 5% bonds payable, issued on 31 March 20X5. The bonds are convertible into 40 common
shares for each $1,000 bond. Bond interest expense was $288,750 for the 9 months of the year that the bond was outstanding.
Required:
Compute basic and diluted EPS for 20X5. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Basic EPS
Diluted EPS
20X5
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning