Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ACCT} 103 Intermediate Financial Accounting 1] Assignment 5 Question 1 [Basic and diluted earnings per share]: The Frost Company has accumulated the foJlowing information relevant

image text in transcribed
image text in transcribed
ACCT} 103 Intermediate Financial Accounting 1] Assignment 5 Question 1 [Basic and diluted earnings per share]: The Frost Company has accumulated the foJlowing information relevant to its 2010 earnings per share. 1. Net income for 2010, $150,000. 2. Eonds payable: On January 1, 2010, the company had issued 10%, $200,000 bonds. Each $1,000 bond is currently convertible into 20 shares of ordinary share. To date, no bonds have been converted. 3. Eonds payable: On January 31, 2010, the company had issued $540,000 of 5.0% bonds. Each $1,000 bond is currently convertible into 11 shares of ordinary share. To date, no bonds have been converted. 4. Preference share: On July 1, 2012, the company had issued 3,000 shares of $2.5 preference share at $100 per share. Each share of preference share is currently convertible into 2.45 shares of ordinary share. To date, no preference share has been converted and no additional shares of preference share have been issued. The current dividends have been paid. 5. lOrdinary share: At the beginning of 2010, 25,000 shares were outstanding. {in July 1, 2,000 additional shares were issued. Un September 1, a 20% bonus issue was declared and issued. On November 1, 2,000 shares were repurchased by the company. 6. Share options: Options to acquire ordinary share at a price of $33 per share were outstanding during all of 2010. Currently, 4,000 shares may be acquired. TCI date, No options have been exercised. 2. Miscellaneous: Stock market prices on ordinary share averaged $41 per share during 2010, and the 2010 ending stock market price was $40 per share. The corporate income tax rate is 30%. Required: Compute the basic and diluted earnings per share for 2010 [Round to 2 decimal places]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Canadian Cases In Financial Accounting

Authors: Carol E. Dilworth, Joan E. D. Conrod

2nd Edition

256111405, 978-0256111408

More Books

Students also viewed these Accounting questions