interest on the convertible loan is allowable for a tax reliefNo conversion had taken place during the current year. TheAccenture Company had made a net income attributable toordinary shareholders of P2,000,000 for the year endedDecember 31, 2021.There are 100,000 ordinary shares outstanding during theentire year.Since January 2021 there had been P800,000 of 5% convertibleloan in issue. The terms of conversion for every P10,000nominal amount are: -120 ordinary shares150 ordinary shares140 ordinary sharesNo conversion had taken place during the current year. iofinterest on the convertible loan is allowable for a tax renerJune 30, 2021June 30, 2022June 30, 2023of 30%.Required:1. Basic earnings per share2. Diluted earnings per share

Earnings per Share The Calculation of earning per share is important for the business entity which…

interest on the convertible loan is allowable for a tax relief The No conversion had taken place during the current year. tof of 30%. Required: 1. Basic earnings per share 2. Diluted earnings per share

interest on the convertible loan is allowable for a tax relief The No conversion had taken place during the current year. tof of 30%. Required: 1. Basic earnings per share 2. Diluted earnings per share

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 21P: Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate...

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Mills Company had five convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight-line method) and dividends on each security during 2019. Each convertible security is described in the following table. The corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which the securities would be included in the diluted earnings per share computations.
Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.
In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
On January 1, 2025, Ariana Corporation issued its 8%, 5-year convertible debtinstrument with a face amount of P8,000,000 for P7,700,000. Interest is payableevery December 31 each year. The debt instrument is convertible into 50,000ordinary shares with a par value of P100. When the debt instrument were issued, thebonds without the conversion option were sold for P7,393,312 yielding 10%. OnDecember 31, 2027, P6,400,000 of the convertible debt instrument were converted.How much is the gain or loss on conversion taken to profit or loss for the year 2027?
On January 1, 2021, Romania Company acquired 3-year bonds with a face amount of P2,000,000 for P1,907,200. The nominal rate is 12% The effective rate is 14% The interest is payable annually on December 31. The entity used the effective interest method and 2 decimal places for PVF. On January 1, 2023, the entity decided to retire all the bonds for P2,150,000. How much is the gain on early retirement of the investment in bonds (round-off answer to the nearest peso value)?
On July 1, 2020, an interest date, P1,000,000 of Siomai Company bonds were converted into 20,000 of Siomai Company’s ordinary share, each having a par value of P40 and a market value of P55. There is P40,000 unamortized discount on the bonds and P25,000 paid in capital arising from bond conversion privilege. What amount of gain or loss should Siomai Company recognize in 2016 as a result of the conversion? A. 300,000 B. 185,000 C. 160,000 D. 0
On January 1 , 2021, Gray Co. issued its 10%, 4-year convertible debt instrument with a face amount of P 4,000,000 for P 4,400,000. Interest is payable every Dec. 31 of year year. The debt instrument is convertible into 35,000 ordinary shares with a par value of P 100. When the debt instruments were issued, the prevailing market rate of interest for similar debt without conversion option is 8%. PV of 8% for an ordinary annuity of P 1 after 4 years 3.312 PV of 8 % after 4 interest periods. .735 What is the balance of the unamortized premium on debt instrument as of Dec. 31, 2021?
On January 1 , 2021, Gray Co. issued its 10%, 4-year convertible debt instrument with a face amount of P 4,000,000 for P 4,400,000. Interest is payable every Dec. 31 of year year. The debt instrument is convertible into 35,000 ordinary shares with a par value of P 100. When the debt instruments were issued, the prevailing market rate of interest for similar debt without conversion option is 8%. PV of 8% for an ordinary annuity of P 1 after 4 years 3.312 PV of 8 % after 4 interest periods. .735 How much of the total proceeds represent the equity component?
The Sweet Corporation issued 10-year, $ 5,270,000 par, 6% callable convertible subordinated debentures on January 2, 2020. The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is 13:1, and in 2 years it will increase to 19:1. At the date of issue, the bonds were sold at 96. Bond discount is amortized on a straight-line basis. Sweet’s effective tax was 20%. Net income in 2020 was $ 8,800,000, and the company had 1,985,000 shares outstanding during the entire year.Compute both basic and diluted earnings per share. (Round answers to 2 decimal places, e.g. $2.55.) Basic earnings per share $ Diluted earnings per share $
On June 1, 2021, VIXEN Company received P1,077,200 plus accrued interest for 12% bonds with face amount of P1,000,000. The bonds were sold to yield 10%. Interest is payable semiannually every July 1 and December 31. The entity elected the fair value option for measuring financial liabilities. On December 31, 2020, the fair value of the bonds is at 108. The change in fair value of the bonds is attributable to market factors. Requirements: 16. How much is the interest expense for the year ended December 31, 2021? 17. How much is the gain or loss from change in fair value of the bonds for 2021? (In the google form, if loss, put a negative sign before the numerical figure.) 18. What is the carrying amount of the bonds payable on December 31, 2021?
On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 for P3,649,600 in order to collect contractual cash flows that are solely payments of principal and interest. The bonds are purchased to yield 10% interest. The nominal interest rate on the bonds is 8% payable annually every December 31. On December 31, 2021, as a result of a change in the business model for managing financial assets, the entity decided to reclassify the bonds from amortized cost to fair value. On that date, the carrying amount of the bond investment is P3,744,016 after discount amortization using the effective interest method. The market value of the bonds on January 1, 2015, is 10%. Requirements: Prepare the necessary journal entries to record the Using the same information, except that the change is from fair value to amortized cost, prepare the necessary journal entries to record the What if, initially, the investment is classified at FVTPL, then subsequently changed it to…
On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 forP3,649,600 in order to collect contractual cash flows that are solely payments of principal and interest.The bonds are purchased to yield 10% interest. The nominal interest rate on the bonds is 8% payableannually every December 31.On December 31, 2021, as a result of a change in the business model for managing financial assets,the entity decided to reclassify the bonds from amortized cost to fair value. On that date, the carryingamount of the bond investment is P3,744,016 after discount amortization using the effective interestmethod. The market value of the bonds on January 1, 2015, is 10%. Requirements: 1. Preparethe necessary journal entries to record the transactions using the change is from fair value to amortized cost.