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Marigold Inc. had net income for the current year ending December 31, 2020 of $872,880. During the entire year, there were 507,000 common shares outstanding. The company had two classes of preferred shares outstanding: the Class A preferred shares were $1.92 cumulative shares of which 11,000 were outstanding, and were convertible to common shares at a rate of 1:1. There were 100,000 $5.92 Class B non-cumulative preferred shares outstanding that were also convertible at a rate of 1:1. Marigold had outstanding a $1,000,000, 6% bond issued in 2009 that was convertible to 22,000 common shares. The company also had outstanding a $1,000,000, 4% bond issued in 2010 that was convertible to 26,000 common shares. No dividends were declared or paid this year. Marigold’s tax rate is 39%. Determine an incremental per share effect for 2009 bonds   Potentially dilutive security   Incremental Numerator Effect   Incremental Denominator Effect   EPS 2009 Bonds   $        $

Marigold Inc. had net income for the current year ending December 31, 2020 of $872,880. During the entire year, there were 507,000 common shares outstanding. The company had two classes of preferred shares outstanding: the Class A preferred shares were $1.92 cumulative shares of which 11,000 were outstanding, and were convertible to common shares at a rate of 1:1. There were 100,000 $5.92 Class B non-cumulative preferred shares outstanding that were also convertible at a rate of 1:1. Marigold had outstanding a $1,000,000, 6% bond issued in 2009 that was convertible to 22,000 common shares. The company also had outstanding a $1,000,000, 4% bond issued in 2010 that was convertible to 26,000 common shares. No dividends were declared or paid this year. Marigold’s tax rate is 39%. Determine an incremental per share effect for 2009 bonds   Potentially dilutive security   Incremental Numerator Effect   Incremental Denominator Effect   EPS 2009 Bonds   $        $

Intermediate Accounting: Reporting And Analysis
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 18E: Monona Company reported net income of 29,975 for 2019. During all of 2019, Monona had 1,000 shares...
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Marigold Inc. had net income for the current year ending December 31, 2020 of $872,880. During the entire year, there were 507,000 common shares outstanding. The company had two classes of preferred shares outstanding: the Class A preferred shares were $1.92 cumulative shares of which 11,000 were outstanding, and were convertible to common shares at a rate of 1:1. There were 100,000 $5.92 Class B non-cumulative preferred shares outstanding that were also convertible at a rate of 1:1. Marigold had outstanding a $1,000,000, 6% bond issued in 2009 that was convertible to 22,000 common shares. The company also had outstanding a $1,000,000, 4% bond issued in 2010 that was convertible to 26,000 common shares. No dividends were declared or paid this year. Marigold’s tax rate is 39%.

Determine an incremental per share effect for 2009 bonds

 
Potentially dilutive security   Incremental
Numerator Effect
   Incremental
Denominator Effect
   EPS
2009 Bonds   $        $ 

 

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