Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Blue Jays Ltd. reported Long-Term Liabilities and Shareholders' Equity in its December 31, 2021, balance sheet as follows: Long Term Liabilities: Bonds Payable 6% interest,

image text in transcribed
Blue Jays Ltd. reported Long-Term Liabilities and Shareholders' Equity in its December 31, 2021, balance sheet as follows: Long Term Liabilities: Bonds Payable 6% interest, convertible to 40 common shares/$1,000 bond $2,200,000 Bonds Payable 9% interest, convertible to 40 common shares/$1,000 bond $5,500,000 Shareholders Equity: $2,080,000 Class A Preferred Shares No par value, $3 dividend, cumulative, each preferred share convertible into 8 common shares, 260,000 authorized, issued, and outstanding Class B Common Shares $5,800,000 No-par, 2,900,000 authorized, issued, and outstanding All of the above reported bonds payable, preferred shares and common shares were outstanding throughout fiscal 2021. No transactions involving the bonds payable, preferred shares or common shares occurred during fiscal 2021, except for interest on the bonds payable. The bonds payable were all issued and sold at par. Preferred dividends had not been declared in fiscal 2020. Blue Jays Ltd. also had Class B common stock written call options to purchase 100,000 common shares at $6.00 per share outstanding throughout fiscal 2021. No options were exercised during fiscal 2021. The fair market value of Blue Jays Ltd.'s common shares was $10.00 per share throughout fiscal 2021. Blue Jays Ltd.'s income tax rate is 15%. The weighted average of common shares outstanding for 2021 was 2,900,000 common shares, and Blue Jays Ltd. earned net income of $5,000,000 1) Calculate Blue Jays Ltd.'s fiscal 2021 basic earnings per share 2) Determine an incremental per share effect for 6% bonds 3) Determine an incremental per share effect for 9% bonds 4) Determine an incremental per share effect for Class A preferred shares 5) Calculate the incremental shares outstanding upon exercise of the options 6) Rank the potentially dilutive securities from parts 2) to 5) from most dilutive to least dilutive 7) Calculate Blue Jays Ltd.'s fiscal 2021 diluted earnings per share calculations to 3 decimals)

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_2

Step: 3

blur-text-image_3

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

Using Financial Accounting

Authors: Carl S. Warren, Jeff Jones, Amanda Farmer

1st Edition

0357507851, 9780357507858

More Books

Students also viewed these Accounting questions

Question

Did the researcher provide sufficient thick description?

Answered: 1 week ago

Question

List the five steps in the message-sending process.

Answered: 1 week ago

Question

List and explain the four steps in the communication process.

Answered: 1 week ago

Question

Describe how communication flows through organizations.

Answered: 1 week ago