Pearson eText Intermediate Accounting -- Instant Access (Pearson+)
3rd Edition
ISBN: 9780136946649
Author: Elizabeth Gordon, Jana Raedy
Publisher: PEARSON+
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Chapter 20, Problem 20.6P
Computing Basic and Diluted EPS, Convertible Bonds, Options, Convertible Preferred Stock, Antidilution, Disclosures. Menon Company provided the following share information for the current year.
| Event and Date | Number of Shares |
| 1/1 Beginning balance | 150,000 |
| 6/1 New share issue | 240,000 |
| 8/1 Two-for-one stock split | |
| 10/1 New share issue | 390,000 |
| 12/1 |
(48,000) |
Merion reported income from continuing operations of $1,000,000 and a $430,000 loss from discontinued operations net of tax. The company is subject to a 40% tax rate. The company granted 120,000 employee options on January 1 that allow employees to acquire 120,000 common shares at $18 per share. The options have an estimated fair value of $10 per share. The average market price of the company’s common shares is $24 per share. Merion has $500,000 6% convertible debt outstanding as of the beginning of the year. Each $1,000 par
Required
- a. Compute the weighted-average number of common shares outstanding for basic earnings per share.
- b. Determine whether any securities are antidilutive, and compute basic and diluted earnings per share. Show all computations.
- c. Prepare all required disclosures beginning with income from continuing operations.
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Alpha company reported the following equity accounts on January 1, 2020. Tpoint hare capital, P20 par, P8,000,000; Share premium, P2,750,000; Retained earnings. P1,275,000. All shares outstanding on January 1 were issued for P26 a share. On December 31. the entity reacquired 20,000 shares at P24 a share and retired them. What is the balance of the share premium?
In connection with your audit of the financial statements of the Pin Shop Company for the year 2020, the following Investment in Ordinary Shares and Dividend Income accounts were presented to you:
Investment in Ordinary Shares
Date
Description
Ref.
Debit
Credit
01/15
10,000 ordinary shares, par value P50, SPIKES Co.
VR-18
390,000
04/30
5,000 shares SPIKES Co. received as share dividend
CJ-7
250,000
05/20
Sold 5,000 shares @ P25
CR-21
125,000
12/10
Sold 2,000 shares @ P60
CR-S2
120,000
Dividend Income
Date
Description
Ref.
Debit
Credit
04/30
Share dividend
SJ-7
250,000
11/30
SPIKES Company ordinary
CR-22
50,000
The following information was obtained during your examination:
From independent sources, you determine the following dividend information:
Type of Dividend
Date
Declared
Date of
Record
Date of
Payment
Rate
Share
Cash
Cash…
Assume that the following data relative to Wildhorse Company for 2021 is available:
Net Income
Transactions in Common Shares
Jan. 1, 2021, Beginning number
Mar. 1, 2021, Purchase of treasury shares
June 1, 2021, Stock split 2-1
Nov. 1, 2021, Issuance of shares
6% Cumulative Convertible Preferred Stock
Sold at par, convertible into 180,000 shares of
common (adjusted for split).
Stock Options
Exercisable at the option price of $25 per share. Average
market price in 2021, $30 (market price and option price
adjusted for split).
Change
Basic earnings per share $
(72,000)
668,000
222,000
$2,890,000
Cumulative
740,000
668,000
1,336,000
1,558,000
$900,000
90,000 shares
Compute the basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. 52.75.)
Chapter 20 Solutions
Pearson eText Intermediate Accounting -- Instant Access (Pearson+)
Ch. 20 - Prob. 20.1QCh. 20 - Prob. 20.2QCh. 20 - If-Converted Method. Does the if-converted...Ch. 20 - Diluted EPS. If all potentially dilutive...Ch. 20 - Diluted EPS. Can diluted earnings per share on...Ch. 20 - Diluted EPS, Convertible Debt, and Preferred...Ch. 20 - Prob. 20.7QCh. 20 - Prob. 20.8QCh. 20 - Prob. 20.9QCh. 20 - EPS Disclosures. is an entity required to present...
Ch. 20 - Prob. 20.11QCh. 20 - Hutchins Company had 200,000 shares of common...Ch. 20 - Prob. 20.2MCCh. 20 - Prob. 20.3MCCh. 20 - Prob. 20.4MCCh. 20 - Refer to the information about Hutchins Company in...Ch. 20 - Prob. 20.6MCCh. 20 - Prob. 20.1BECh. 20 - Prob. 20.2BECh. 20 - Computing Income for Basic EPS. Russo Watches, Ltd...Ch. 20 - Prob. 20.4BECh. 20 - Compute Weighted-Average Number of Shares...Ch. 20 - Compute Weighted-Average Number of Shares...Ch. 20 - Prob. 20.7BECh. 20 - Prob. 20.8BECh. 20 - Prob. 20.9BECh. 20 - Prob. 20.10BECh. 20 - Prob. 20.11BECh. 20 - Computing Basic and Diluted EPS, Options. Nicks...Ch. 20 - Computing Diluted EPS, Convertible Debt. Axelon...Ch. 20 - Computing Basic and Diluted EPS, Preferred Stock....Ch. 20 - Computing Weighted-Average Number of Common Shares...Ch. 20 - Prob. 20.3ECh. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.5ECh. 20 - Computing Basic and Diluted EPS, Convertible Bonds...Ch. 20 - Computing Basic and Diluted EPS, Convertible Bonds...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Options,...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.12ECh. 20 - Prob. 20.1PCh. 20 - Prob. 20.2PCh. 20 - Computing Basic and Diluted EPS. Convertible...Ch. 20 - Prob. 20.4PCh. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Computing Basic and Diluted EPS, Convertible...Ch. 20 - Prob. 20.7PCh. 20 - Prob. 20.8PCh. 20 - Prob. 1JCCh. 20 - Prob. 1FSCCh. 20 - Prob. 1SSCCh. 20 - Basis for Conclusions Case 1: Antidilutive...Ch. 20 - Basis for Conclusions Case 2: Treasury Stock...
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