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Before you begin, print out all the pages in this workbook. Gibson Energy Ltd.'s general ledger account for Cash in Bank showed the following at

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Before you begin, print out all the pages in this workbook. Gibson Energy Ltd.'s general ledger account for Cash in Bank showed the following at December 31, 2019: Cash in Bank Folio Debit Credit Date Nov. 30 Dec. 1-31 Dec. 1-31 Description Balance (overdraft) Cash receipts Cash Payments Acct. No. 101 Balance DR (CR) 221,000 1,034,000 62,000 CR110 CDJ21 813,000 972,000 232 December deposits made and checks issued were as follows: Deposits Checks Date Amount Amount Dec. 5 30,000 110,000 7 210.000 83,000 85,000 25,000 32,000 59,000 26,000 590,000 420,000 17,000 16,000 28,000 51,000 77,000 21,000 15,000 $813,000 $972,000 31 The December bank statement showed: First Chartered Bank Gibson Energy Ltd. Bank Statement Month Ended December 31, 2019 Date Type Out in Deca Deposit 20.000 Balance 215.000 Chapter 11 Assignment CP 11-2 Bagan Corporation, a profitable growth company with 200,000 shares of common stock outstanding, Is in need of approximately $40 million in new funds to finance required expansion. Currently, there are no other equities outstanding. Management has three options open: a. Sell $40 million of 12 per cent bonds at face value. b. Sell shares of 10% preferred stock: 400,000 shares at $100 each (dividend $10 per share). c. Sell another 200,000 shares of common stock at $200 each. Operating income (before interest and income taxes) on completion of the expansion is expected to average $12 million per year; the income tax rate is 50%. Required: 1. Complete the schedule below and calculate the earnings per share of common stock. 12% Preferred Common bonds stock stock Income before interest and income taxes $12,000,000 $12,000,000 $12,000,000 Less: Interest expense Income before taxes Less: Income taxes at 50% Net Income Less: Preferred dividends Net Income available to common stockholders Number of common shares outstanding Earnings per share of common stock 2. Which financing option is most advantageous to the common stockholders? Why

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