Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

From the December 31, 2019 balance sheet: Convertible Preferred Stock, 6% cumulative, $100 par value, 100,000 shares authorized, 50,000 shares issued and outstanding. Dividends to

From the December 31, 2019 balance sheet: Convertible Preferred Stock, 6% cumulative, $100 par value, 100,000 shares authorized, 50,000 shares issued and outstanding. Dividends to preferred shareholders have been declared on schedule. Each preferred share is convertible to 4 shares of common stock (already adjusted for the 5% stock dividend). Common Stock, $1 par, 10,000,000 shares authorized, 2,400,000 shares issued and outstanding. Convertible bonds payable, 6% interest rate, $7,000,000 balance at December 31, 2018, issued at a discount on March 15, 2014. Each of the $1,000 bonds is convertible into 10 shares of common stock (already adjusted for the 5% stock dividend).

WDW Enterprises reported $450,000 of Bond Interest Expense on the convertible bonds in 2019, before income taxes.

Executive employees were granted 270,000 stock options (already adjusted for the 5% stock dividend) on October 1, 2019 with an exercise price of $40 per share. The options will become exercisable on January 2, 2020 and the exercise period expires on October 1, 2025. During the 2019 year the average market price per common share of WDW Enterprises was $60 per share.

Net income for the 2020 year is $7,500,000, after tax. The income tax rate is 25%

on September 1, 2020, WDW Enterprises issued 400,000 common shares at $62 per share to raise funds for the acquisition of 20th Century Fox Technology.

compute the Weighted Average Number of Common Shares for WDW Enterprises 2020 BASIC EARNINGS PER share

Compute Earnings Available to Common Shareholders for WDW Enterprises 2020 BASIC EARNINGS PER SHARE

Compute basic EPS

Determine WDW Enterprises 2020 DILUTED EARNINGS PER SHARE. Show computations that determine if any potentially dilutive security is dilutive or antidilutive.

Computations for Convertible Preferred Stock (Incremental)

Computations for Convertible Bonds Payable (Incremental)

Computations for Stock Options (Incremental)

Weighted Average Number of Common Shares for WDW Enterprises 2020 DILUTED EARNINGS PER SHARE?

Earnings Available to Common Shareholders for WDW Enterprises 2020 DILUTED EARNINGS PER SHARE?

Compute diluted EPS

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

Quality Management System A Planning And Auditing Guide

Authors: Walter Willborn

1st Edition

083113013X, 978-0831130138

More Books

Students also viewed these Accounting questions

Question

What have you done that shows initiative and willingness to work?

Answered: 1 week ago

Question

5. Prepare for the role of interviewee

Answered: 1 week ago

Question

6. Secure job interviews and manage them with confidence

Answered: 1 week ago