9th Edition

ISBN: 9781307019636

Author: SPICELAND

Publisher: MCG/CREATE

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Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue autho…

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Textbook Question

Chapter 19, Problem 19.15P

EPS; antidilution

• LO19–4 through LO19–10, LO19–13

Alciatore Company reported a net income of $150,000 in 2018. The weighted-average number of common shares outstanding for 2018 was 40,000. The average stock price for 2018 was $33. Assume an income tax rate of 40%.

Required:

For each of the following independent situations, indicate whether the effect of the security is antidilutive for diluted EPS.

1. 10,000 shares of 7.7% of $100 par convertible, cumulative preferred stock. Each share may be converted into two common shares.
2. 8% convertible 10-year, $500,000 of bonds, issued at face value. The bonds are convertible to 5,000 shares of common stock.
3. Stock options exercisable at $30 per share after January 1, 2020.
4. Warrants for 1,000 common shares with an exercise price of $35 per share.
5. A contingent agreement to issue 5,000 shares of stock to the company president if net income is at least $125,000 in 2019.

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Chapter 19, Problem 19.14P

Chapter 19, Problem 19.16P

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Chapter 19 Solutions

INTERMEDIATE ACCT. W/CONNECT>CUSTOM<

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