Question
Monty Corporation reported Long-Term Liabilities and Shareholders' Equity in its December 31, 2020 balance sheet as follows: Long Term Liabilities: Bonds Payable $7,500,000 12% interest,
Monty Corporation reported Long-Term Liabilities and Shareholders' Equity in its December 31, 2020 balance sheet as follows:
Long Term Liabilities: | |||
Bonds Payable | $7,500,000 | ||
12% interest, convertible to 25 common shares/$1,000 bond | |||
Bonds Payable | $4,500,000 | ||
7% interest, convertible to 40 common shares/$1,000 bond | |||
Shareholders' Equity: | |||
Class A Preferred shares | $5,000,000 | ||
$2.90 cumulative preferred share convertible into 8 common shares, 106,000 authorized, issued and outstanding | |||
Class B Common shares | $35,000,000 | ||
Unlimited number authorized 5,000,000 issued and outstanding |
All of the above reported bonds payable, preferred shares and common shares were outstanding throughout the entirety of fiscal 2020. No transactions involving the bonds payable, preferred shares or common shares occurred during fiscal 2020, except for interest on the bonds payable. The bonds payable were all issued and sold at par. Monty also had Class B common stock options to purchase 280,000 common shares at $11.00 per share outstanding throughout fiscal 2020. No stock options were exercised during fiscal 2020. The fair market value of Monty's common shares was $16.00 per share throughout the entirety of fiscal 2020. Montys income tax rate is 36%. The weighted average of common shares outstanding for 2020 was 5,000,000 common shares, and Monty earned net income of $15,667,400.
QUESTION: Calculate Monty's fiscal 2020 diluted earnings per share
NUMERATOR | DENOMINTAOR | EPS | |
BASIC: Which of following* Class A Preferred 7% Bonds 12% Bonds
| |||
| |||
SUBTOTAL Which of following* Class A Preferred 7% Bonds 12% Bonds | |||
SUBTOTAL Which of following* Class A Preferred 7% Bonds 12% Bonds | |||
Total | |||
Diluted EPS |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started