At December 31, 2015, the books of Yorke Corporation include the following balances: Long-term liabilities: Bonds payable,

Question:

At December 31, 2015, the books of Yorke Corporation include the following balances:

Long-term liabilities:

Bonds payable, 8%, each $1,000 bond is convertible into 50 shares

of common stock; bonds sold at par and were issued November 3, 2014 . . . . . . . $ 500,000

Stockholders' equity:

Preferred stock, 7%, $50 par, cumulative, nonconvertible,

10,000 shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000

Paid-in capital in excess of par, preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000

Common stock, $10 par, authorized 300,000 shares;

199,500 shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,995,000

Paid-in capital in excess of par, common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519,000

The records of Yorke reveal the following additional information.

(a) Had 150,000 shares of common stock outstanding on January 1, 2015.

(b) Sold 40,000 shares of common stock for cash on April 30, 2015.

(d) Had income before extraordinary items (after tax) of $715,000.

(e) Had extraordinary loss (net of tax), $16,000.

(f) Had income tax rate, 30%.

(g) Bond indenture does not provide for increase in shares at conversion due to stock dividends declared subsequent to the bond issue date.

1. Is this a simple or complex capital structure?

2. Compute all EPS amounts as required by FASB ASC Topic 260. How should the EPS data be presented?

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