INTERMEDIATE ACCOUNTING +ACCLL
9th Edition
ISBN: 9781260951349
Author: SPICELAND
Publisher: MCG
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Chapter 19, Problem 19.18P
(1)
Earnings per share (EPS): The amount of earnings made available to each common share is referred to as earnings per share. Dilutive securities like convertible bonds, convertible preferred stock, and stock options, reduce the EPS by increasing the common shares.
Use the following formula to determine EPS:
To determine
The basic earnings per share of Corporation C for the year ended December 31, 2018
(2)
To determine
The diluted earnings per share of Corporation C for the year ended December 31, 2018
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29/4/2021
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P12-14
Share repurchase : The following financial information is available on the Bond Recording Company:
Earnings
available
to
$ 800,000
common
shareholders
Number of common shares outstanding
400,000
Earnings per share ($ 800,000 +400,000)
$ 2
Market price per share
$ 20
Price / Earning Ratio (P / E) ($ 20 + $ 2)
10
The company is currently contemplating whether to use $ 400,000 of its earnings to pay cash dividends of $ 1 per share or to
buy back shares at $ 21 per share.
About how many shares can the
company buy back at the price of $ 21 per share using the funds that would be used to pay the dividend in cash?
а.
b.
Calculate EPS after repurchase.
Explain your calculations.
С.
If the shares are sold at a price
10 times higher than the earnings, what will the market price be after the buyback?
Compare the positions of the
shareholders under the dividend payment and share buyback alternatives. What are the tax implications…
At January 1, 2024, M. E. Gainor Corporation had outstanding the following securities:
800 million common shares
20 million 5% cumulative preferred shares, $50 par
6.4% convertible bonds, $3,500 million face amount, convertible into 90 million common shares
The following additional information is available:
On September 1, 2024, M. E. Gainor sold 75 million additional shares of common stock.
■Incentive stock options to purchase 60 million shares of common stock after July 1, 2023, at
$12 per share, were outstanding at the beginning and end of 2024. The average market price
of Gainor's common stock was $18 per share during 2024.
• Gainor's net income for the year ended December 31, 2024, was $2,310 million. The effective
income tax rate was 25%.
Required:
1. & 2. Calculate basic and the diluted earnings per common share for the year ended December 31,
2024.
Note: Do not round intermediate calculations. Except for per share amounts, enter your answers
in millions (i.e., 10,000,000 should…
At January 1, 2024, M. E. Gainor Corporation had outstanding the following securities:
660 million common shares
20 million 6% cumulative preferred shares, $50 par
6.4% convertible bonds, $3,500 million face amount, convertible into 70 million common shares
The following additional information is available:
• On September 1, 2024, M. E. Gainor sold 72 million additional shares of common stock.
• Incentive stock options to purchase 40 million shares of common stock after July 1, 2023,
at $14 per share, were outstanding at the beginning and end of 2024. The average market
price of Gainor's common stock was $20 per share during 2024.
• Gainor's net income for the year ended December 31, 2024, was $2,154 million. The
effective income tax rate was 25%.
Required:
1. & 2. Calculate basic and the diluted earnings per common share for the year ended December
31, 2024.
Note: Do not round intermediate calculations. Except for per share amounts, enter your
answers in millions (i.e., 10,000,000…
Chapter 19 Solutions
INTERMEDIATE ACCOUNTING +ACCLL
Ch. 19 - Prob. 19.1QCh. 19 - Prob. 19.2QCh. 19 - The Tax Code differentiates between qualified...Ch. 19 - Stock option (and other share-based) plans often...Ch. 19 - What is a simple capital structure? How is EPS...Ch. 19 - Prob. 19.6QCh. 19 - Blake Distributors had 100,000 common shares...Ch. 19 - Why are preferred dividends deducted from net...Ch. 19 - Prob. 19.9QCh. 19 - The treasury stock method is used to incorporate...
Ch. 19 - The potentially dilutive effect of convertible...Ch. 19 - How is the potentially dilutive effect of...Ch. 19 - Prob. 19.13QCh. 19 - If stock options and restricted stock are...Ch. 19 - Wiseman Electronics has an agreement with certain...Ch. 19 - Prob. 19.16QCh. 19 - When the income statement includes discontinued...Ch. 19 - Prob. 19.18QCh. 19 - Prob. 19.19QCh. 19 - (Based on Appendix B) LTV Corporation grants SARs...Ch. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Stock options LO192 Under its executive stock...Ch. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Prob. 19.7BECh. 19 - Prob. 19.8BECh. 19 - Prob. 19.9BECh. 19 - Performance-based options LO192 Refer to the...Ch. 19 - Prob. 19.11BECh. 19 - Prob. 19.12BECh. 19 - EPS; nonconvertible preferred shares LO197 At...Ch. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Prob. 19.3ECh. 19 - Prob. 19.4ECh. 19 - Prob. 19.5ECh. 19 - Prob. 19.6ECh. 19 - Prob. 19.7ECh. 19 - Prob. 19.8ECh. 19 - Prob. 19.9ECh. 19 - Prob. 19.10ECh. 19 - Prob. 19.11ECh. 19 - EPS; shares issued; stock dividend LO195, LO196...Ch. 19 - Prob. 19.13ECh. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - EPS; net loss; nonconvertible preferred stock;...Ch. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - Prob. 19.17ECh. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - EPS; shares issued; stock options LO196 through...Ch. 19 - EPS; convertible preferred stock; convertible...Ch. 19 - Prob. 19.22ECh. 19 - Prob. 19.23ECh. 19 - Prob. 19.24ECh. 19 - Prob. 19.25ECh. 19 - EPS; concepts; terminology LO195 through LO1913...Ch. 19 - FASB codification research LO192 The FASB...Ch. 19 - Prob. 19.28ECh. 19 - Prob. 19.29ECh. 19 - Prob. 19.30ECh. 19 - Restricted stock units; cash settlement Appendix...Ch. 19 - Stock options; forfeiture; exercise LO192 On...Ch. 19 - Stock options; graded vesting LO192 January 1,...Ch. 19 - Stock options; graded vesting; measurement using a...Ch. 19 - Stock options; graded vesting; IFRS LO192, LO1914...Ch. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - EPS from statement of retained earnings LO194...Ch. 19 - EPS from statement of shareholders equity LO194...Ch. 19 - EPS; non convertible preferred stock; treasury...Ch. 19 - EPS; non convertible preferred stock; treasury...Ch. 19 - EPS; non convertible preferred stock; treasury...Ch. 19 - EPS; convertible preferred stock; convertible...Ch. 19 - EPS; antidilution LO194 through LO1910, LO1913...Ch. 19 - EPS; convertible bonds; treasury shares LO194...Ch. 19 - Prob. 19.17PCh. 19 - Prob. 19.18PCh. 19 - EPS; options; restricted stock; additional...Ch. 19 - Prob. 19.1BYPCh. 19 - Communication Case 192 Stock options; basic...Ch. 19 - Prob. 19.3BYPCh. 19 - Real World Case 195 Share-based plans; Walmart ...Ch. 19 - Prob. 19.6BYPCh. 19 - Prob. 19.7BYPCh. 19 - Analysis Case 198 EPS concepts LO194 through...Ch. 19 - Prob. 19.9BYPCh. 19 - Prob. 19.10BYPCh. 19 - Communication Case 1911 Dilution LO199 I thought...Ch. 19 - Real World Case 1912 Reporting EPS; discontinued...Ch. 19 - Analysis Case 1913 Analyzing financial statements;...Ch. 19 - Analysis Case 1915 Kelloggs EPS; PE ratio;...Ch. 19 - Prob. 19.16BYPCh. 19 - Prob. 1CCTCCh. 19 - Air FranceKLM Case IFRS LO199 Air FranceKLM (AF),...
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