Dream Corporation reported net income of $44,000 for 2019. The company has 10,000 shares of common stock

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Dream Corporation reported net income of $44,000 for 2019. The company has 10,000 shares of common stock issued and outstanding for all of 2019 and no preferred stock. During 2018, Dream issued $400,000 of 8% convertible bonds at par value. Each $1,000 bond can be converted into 24 shares of common stock. No bonds have been converted as of December 31, 2019. Dream has a 30% tax rate.


Required:
1. Calculate the earnings per share amounts that Dream should disclose on its 2019 income statement.
2. How will the calculations of earnings per share change if the convertible bonds are antidilutive?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For  book-img-for-question

Intermediate Accounting Reporting and Analysis

ISBN: 978-1337788281

3rd edition

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

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