Intermidiate Accounting II

Q5: Net income for Bronze Corp. for the year was $700,000, and there were 250,000 shares of its $10-par common stock and 5,000 shares of its $100-par 6% preferred stock outstanding throughout the year. During the year, no new shares of any class of stock were issued and no dividends were declared.

(a) Calculate basic EPS assuming the preferred stock is cumulative.

(b) Calculate basic EPS assuming the preferred stock is non-cumulative.

a) EPS = b)

Q5: Net income for Bronze Corp. for the year was $700,000, and there were 250,000 shares of its $10-par common stock and 5,000 shares of its $100-par 6% preferred stock outstanding throughout the year. During the year, no new shares of any class of stock were issued and no dividends were declared. (a) Calculate basic EPS assuming the preferred stock is cumulative. (b) Calculate basic EPS assuming the preferred stock is non-cumulative, a) EPSE b) EPS b) Q6: Throughout the year, Iron Corp. had 40,000 average common shares outstanding, and its net income for the year was $300,000 after deducting income tax at 20%. The corp, had $200,000 of 10% convertible bonds outstanding since last year. Assume each $1,000 bond is convertible into (a) 10 shares of common stock, (b) 12 shares of common stock Basic EPS Diluted EPS Diluted EPS- Q7: Throughout the year, Molten Corp. had 60,000 average common shares outstanding, and its net income for the year was $900,000. In addition it had unexercised stock warrants allowing the purchase of 10,000 shares at $80 per share. Assume the market price per share was (a) $81 per share, (b) $78 per share. a) Diluted EPS = b) Diluted EPS