On January 1, ABC Company has 100,000 outstanding ordinary shares. During the year, ABC reported net income of P 5,000,000. Income tax rate is 30%. In addition, ABC issued on May 1 a 4,000 P 1,000 12% convertible bonds at face amount. Each bond is convertible into 3 ordinary shares. On October 1, 2,000 bonds are converted. How much is the basic earnings per share?

On January 1, ABC Company has 100,000 outstanding ordinary shares. During the year, ABC reported net income of P 5,000,000. Income tax rate is 30%. In addition, ABC issued on May 1 a 4,000 P 1,000 12% convertible bonds at face amount. Each bond is convertible into 3 ordinary shares. On October 1, 2,000 bonds are converted. How much is the basic earnings per share?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 20EA: Longmont Corporation earned net income of $90,000 this year. The company began the year with 600...

See similar textbooks

Similar questions

Medhurst Corporation issued $90,000 in bonds for $87,000. The bonds had a stated rate of 8% and pay interest quarterly. What is the journal entry to record the sale of the bonds?
A company issued $100,000, 5-year bonds, receiving $97,000. What is the balance sheet presentation immediately after the sale?
Medhurst Corporation issued $90,000 in bonds for $87,000. The bonds had a stated rate of 8% and pay interest quarterly. What is the journal entry to record the first interest payment?
Longmont Corporation earned net income of $90,000 this year. The company began the year with 600 shares of common stock and issued 500 more on April 1. They issued $5,000 in preferred dividends for the year. What is the numerator of the EPS calculation for Longmont?
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
Below is select information from two, independent companies. Additional information includes: On January 1, Company A issued a 5-year $1,500,000 bond with at 6% stated rate. Interest is paid semiannually and the bond was sold at 105.5055 to yield a market rate of 4.75%. On January 1, Company B sold $1,500,000 of common stock and paid dividends of $75,000. A. Prepare an income statement for each company (ignore taxes) B. Explain why the net income amounts are different, paying particular attention to the operational performance and financing performance of each company. (Hint: it may be helpful for you to create an amortization table).
MANILA CO. On January 1, 2X16, Manila Co. has 100,000 outstanding ordinary shares. During the year, Manila Co. reported a net income of P5,000,000. The income tax rate is 30%. Besides, Manila Co. has 4,000, 10% convertible bonds with 1,000 face amount. Each bond is convertible into five (5) ordinary shares. Determine the amount of basic earnings per share for the year. Determine the amount of diluted earnings per share under each of the following scenarios. Bonds were issued on January 1, 2X16, and there were no conversions made during the Bonds were issued on April 1, 2X16, and there were no conversions made during the Bonds were issued in the previous year and were converted on October 1, 2X16
On January 1, 2X16, Manila Co. has 100,000 outstanding ordinary shares. During the year, Manila Co. reported a net income of P5,000,000. The income tax rate is 30%. Besides, Manila Co. has 4,000, 10% convertible bonds with 1,000 face amount. Each bond is convertible into five (5) ordinary shares. Required: Solve for the following: 1. Determine the amount of basic earnings per share for the year. 2. Determine the amount of diluted earnings per share under each of the following scenarios. a. Bonds were issued on January 1, 2X16, and there were no conversions made during the year. b. Bonds were issued on April 1, 2X16, and there were no conversions made during the year. c. Bonds were issued in the previous year and were converted on October 1, 2X16.
Lone Company reported the following at year-end: Bonds payable – 10% Ordinary share capital, P100 par, 50,000, shares Net income 1,000,000 5,000,000 1,730,000 The bonds are convertible into ordinary shares in the ratio of 10 ordinary shares for each P1,000 bond. The income tax rate is 30%. Requirement: A. Compute for the Basic earnings per share. B. Compute for the Diluted earnings per share.
KKK Company reported the following at year-end: 10% Bonds payable 1,000,000 Ordinary share capital, P100 par, 50,000 shares 5,000,000 Net income 1,730,000 The bonds are convertible into ordinary shares in the ratio of 10 ordinary shares for each P1,000 bond. The income tax rate is 30%. Questions: 1. Compute for the basic earnings per share. 2. Compute for the diluted earnings per share.
Mirrlees Corp. has $3,000,000 bonds convertible into 50 shares per $1,000 bond. Mirrlees has 1,000,000 outstanding shares. Mirrlees has a tax rate of 21%. The average Aa bond yield at the time of issue was 10%. Compute the "basic earnings per share" if after-tax earnings are $1,400,000. A. $1.40 B. $0.71 C. $1.25 D. $1.33
14 On January 1, ABC Company has 120,000 outstanding ordinary shares. During the year, ABC reported net income of P 3,000,000. Income tax rate is 30%. In addition, ABC issued on May 1 a 1,800 P 1,000 10% convertible bonds at face amount. Each bond is convertible into 5 ordinary shares. How much is the diluted earnings per share? Group of answer choices 25.00 23.81 25.70 24.48