The following information is taken from Multi-Task Corporation’s November 30, 2021 balance sheet:Liabilities: 6% Bonds payable, $4,500,000, maturing October 31, 2024, each $1,000 bond convertible into 25 common shares at any time up to October 31, 2024 $4,500,000 Shareholders’ Equity: 7% Cumulative preferred shares, convertible at the rate of 5 common shares for 1 preferred share, 44,380 shares outstanding 957,000 Common shares, 2,675,000 shares issued and outstanding8,025,000 Multi-Task Corporation had net income for the 2021 year of $8,344,500. Multi-Task pays income tax at a rate of 28%. Both the bonds and the preferred shares were outstanding for the entire year. The weighted-average number of common shares outstanding for the 2021 year was 2,745,500.Required:Calculate basic earnings per share for Multi-Task Corporation for the year ending November 30, 2021. Calculate diluted earnings per share for Multi-Task Corporation for the year ending November 30, 2021.

Basic Earnings Per Share : Net income available to common stockholders / Weighted average number of…

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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 26P

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The following information is taken from Multi-Task Corporation’s November 30, 2021 balance sheet:

Liabilities:
6% Bonds payable, $4,500,000, maturing October 31, 2024, each $1,000 bond convertible into 25 common shares at any time up to October 31, 2024	$4,500,000

Shareholders’ Equity:
7% Cumulative preferred shares, convertible at the rate of 5 common shares for 1 preferred share, 44,380 shares outstanding	957,000

Common shares, 2,675,000 shares issued and outstanding	8,025,000

Multi-Task Corporation had net income for the 2021 year of $8,344,500. Multi-Task pays income tax at a rate of 28%. Both the bonds and the preferred shares were outstanding for the entire year. The weighted-average number of common shares outstanding for the 2021 year was 2,745,500.

Required:

Calculate basic earnings per share for Multi-Task Corporation for the year ending November 30, 2021.
Calculate diluted earnings per share for Multi-Task Corporation for the year ending November 30, 2021.

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