Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 20, Problem 20.5P
Computing Basic and Diluted EPS, Convertible Bonds, Disclosures. Note the following partial income statement for Cassie Corporation for the current year.
| Partial Income Statement | For the Current Year |
| Income from Continuing Operations | $3,650,000 |
| Income from Discontinued Operations, net of tax | 325,200 |
| Net Income | $3,975,200 |
The company is subject to a 40% tax rate. We present share information for the current year m the following table.
| Event and Date | Number of Shares |
| 1/1 Beginning balance | 1,890,000 |
| 3/1 New share issue | 240,000 |
| 11/1 |
(90,000) |
Cassie had 360,000 options outstanding all year at an exercise price of $25 per share. The average market price per share of the company s shares for the current year is $40. The company issued 7%, $6,500,000 convertible debt on April 1 of the current year at par value. Each $1 000 par
Required
- a. Compute basic and diluted earnings per share for income from continuing operations and net income Show all computations.
- b. Prepare all required disclosures beginning with income from continuing operations.
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Intermediate Accounting (2nd Edition)
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