Do you notice what I typed above the screenshot, which is located above? In your opinion, is this the correct way to describe what you see on H26 of the worksheet called EPS that make up the workbook called ACC 309 7-1 Final Project Milestone Three? I am referring to the comment (*1,775,000 is the overall total outstanding shares of common stock after the board of directors of this company converted 5,000 convertible bonds into and issuing 25,000 outstanding shares of common stock and issuing 1,750,000 outstanding shares of common stock.)

Do I have to multiply 5,000 outstanding shares of Preferred stock that were issued by the board of directors of Peyton Approved and found on cell F29 of the Revised Balance Sheet as of December 31, 20XX by 10 shares of Peyton Approved's common stock to calculate the value that should be entered on H16 for Common Shares Outstanding after conversion? I am referring to the question, which asks, "(a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where share can be converted into 10 shares of Peyton common stock?"

B G . 1 D E F Peyton Approved Balance Sheet As of December 31, 20XX 2 3 4 5 Assets 6 7 8 9 10 Current Assets: Cash Marketable Securities Accounts Receivable Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Misc. Supplies $ 1,488,999.34 $ 5,235,000.00 $ 7,092,495.88 $ 1,605,098.52 $ 128,152.63 $ 71,877.07 $ 207,834.14 $ 17,647.42 Liabilities and Owners' Equity Current Liabilities: Accounts Payable $ 1,555,212.85 Wages Payable $ 250,203.31 Interest Payable $ 21,888.22 Current Portion of Bonds Payable $ 1,000,000.00 Income taxes currently payable $ 990,167.91 Accrued Pension Liability $ 107,041.70 Accrued Employees Health Insurance $ 43,781.91 Lease Liability $ 101,514.00 Contingent Liability - Lawsuit $ Deferred Tax Liability $ 52,325.25 11 12 13 14 15 16 17 18 Total Current Assets $15,847,105.00 Total Current Liabilities $ 4,122,135.15 19 20 Long Term Liabilities: Bonds Payable 10%, 20 year 21 Long Term/Fixed Assets: $ 4,000,000.00 22 23 24 Land $ 250,000.00 Building $ 1,250,000.00 Baking Equipment $ 2,382,654.00 Accumulated Depreciation $ (328,282.00) Net Fixed assets Total Long Term Liabilities: $ 4,000,000.00 25 26 $3,554,372.00 Total Liabilities: $ 8,122,135.15 27 28 Patent Net of Amortization $ 47,500.00 $ 500,000.00 29 30 Preferred Stock - (10,000 authorized, 5,000 issued, 10%, $100 par value) Common Stock - (2,000,000 shares authorized, 1,750,000 issued, $1 par) Retained Earnings $ 1,750,000.00 31 32 $ 9,076,841.85 33 34 Total Equity $11,326,841.85 35 36 Total Assets: $19,448,977.00 Total Liabilities & Equity $19,448,977.00 A B F G H K L M 1 HOME C D E 1 Peyton Approved Earnings per Share For Year Ended 12/31/20XX 2 3 4 5 6 7 8 Net Income Less: Preferred Dividends Earnings Available to Common Shareholders Common Shares Outstanding Basic EPS $ 12,428,719.26 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statem $ (50,000.00) $50,000 is from ending balance of Cash dividends of Preferred stock on Trial Balance She $ 12,378,719.26 Net income ($12,428,719.26) - Preferred dividends ($50,000) $12,378,719 1,750,000 Outstanding Common Shares issued (1,750,000) is from Revised Balance Sheet for 2017 $ 7.07 Earnings Available to Common Shareholders ($12,378,719 26)/Common Shares Outstand 9 10 12 If all preferred shares are converted: 13 14 15 16 Net Income Additional Common Shares corrected Common Shares Outstanding after conversion EPS if preferred shares converted Preferred shares are antidilutive $ 12,428,719.26 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statem 5,000 5,000 is issued shares of Preferred stock from Revised Balance Sheet for 2017 1,755,000 Outstanding Common Shares issued (1,750,000) + Additional Common Shares (5,000) $ 7.08 Net income after income taxes ($12,428,719.26)/Common Shares Outstanding after conve $ 17 18 19 20 21 22 23 24 If all bonds are converted: Net Income Less: Preferred Dividends Add back interest on bonds, net of income corrected Earnings Available to Common Shareholders Additional Common Shares Common Shares Outstanding after conversion Fully diluted EPS $ 12,428,719.26 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statem (50,000.00) $50,000 is from ending balance of Cash dividends of Preferred stock on Trial Balance She $ 300,000.00 $4,000,000*0.01*(1-0.25) $400,000*0.75 $ 300,000.00 The interest $ 12,678,719.26 $12,428,719.26 - $50,000 + $300,000 $12,678,719.26 25,000 The bonds are $5,000,000 (see the balance sheet current and long term portion = $ 1,775,000 Outstanding Common Shares issued (1,750,000) + Additional Common Shares (25000) 7.14 Earnings Available to Common Shareholders ($12,678,719.26)/Common Shares Outstand This is now correct! 25 26 27 28 34 35 36 37 Peyton plans to raise $1,000,000 million of additional capital for the coming year. They anticipate that it will enable them to earn an additional $600,000 after tax. What would be the impact on earnings per share if they raise the $1,000,000 by: a) issuing 10,000 share of 10% $100 par value convertible preferred stock, where each share can be converted into 10 shares of Peyton common stock? b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can be converted into? 5 shares of Peyton common stock? c) $500,000 of each of the above? 38 39 40 41 42 43 44 45 $12,428,719.26 is balance for Net income after income taxes from Revised Income Statem $ 13,028,719.26 $12,428,719.26 + $600,000 $13,028,719.26 $50,000 is from ending balance of Cash dividends of Preferred stock on Trial Balance She Net income ($12,428,719.26) - Preferred dividends ($50,000) $ 12,378,715 1,750,000 Outstanding Common Shares issued (1,750,000) is from Revised Balance Sheet for 2017 $ Earnings Available to Common Shareholders ($12,378,71926)/Common Shares Outstand Net Income corrected Less: Preferred Dividends Earnings Available to Common Shareholders Common Shares Outstanding Basic EPS 46 47 48 49 50 a If all preferred shares are converted: 51 52 53 Net Income corrected Additional Common Shares Common Shares Outstanding after conversion FPS if nreferred shares converted $ 13,028,719.26 $13,028,719.26 is updated balance for Net income after paying income taxes from Revise 5,000 is issued shares of Preferred stock from Revised Balance Sheet for 2017 Outstanding Common Shares issued (1,750,000) + Additional Common Shares (5,000) Net income after income taxes ($12428 719 267Common Shares Outstanding after conve 54 55 *Peyton Approved issued (sold) 1.750,000 outstanding shares found on Common Stock - (2.000.000 shares) underneath the [Total Liabilities found on Revised Balance Sheet As of December 31, 20XX] Common Shares Outstanding after conversion Formula Outstanding Common Shares issued (1,750.000) + Additional Common Shares (25,000) = Common Shares Outstanding after conversion (or Outstanding shares of common stock after conversion) = 1,750,000 + 25,000 = 1,775,000 *1,775.000 is the overall total outstanding shares of common stock after the board of directors of this company converted 5,000 convertible bonds into and issuing 25,000 outstanding shares of common stock and issuing 1.750.000 outstanding shares of common stock