Multiple Choice Question 51

On December 1, 2018, Bonita Industries issued at 102, 650 of its 7%, $1,000 bonds. Attached to each bond was one detachable stock warrant entitling the holder to purchase 10 shares of Bonita's common stock. On December 1, 2018, the market value of the bonds, without the stock warrants, was 95, and the market value of each stock purchase warrant was $50. The amount of the proceeds from the issuance that should be accounted for as the initial carrying value of the bonds payable would be

$623220.

$663000.

$629850.

$650000.

Multiple Choice Question 114

At December 31, 2017, Sheffield Corp. had 795000 shares of common stock outstanding. On October 1, 2018, an additional 157000 shares of common stock were issued. In addition, Sheffield had $10950000 of 6% convertible bonds outstanding at December 31, 2017, which are convertible into 356000 shares of common stock. No bonds were converted into common stock in 2018. The net income for the year ended December 31, 2018, was $2600000. Assuming the income tax rate was 30%, the diluted earnings per share for the year ended December 31, 2018, should be (rounded to the nearest penny)

$2.74.

$3.67.

$2.57.

$2.18.

Multiple Choice Question 113

On January 2, 2018, Vaughn Manufacturing issued at par $10800 of 6% bonds convertible in total into 1000 shares of Vaughn's common stock. No bonds were converted during 2018. Throughout 2018, Vaughn had 1000 shares of common stock outstanding. Vaughn's 2018 net income was $4200, and its income tax rate is 30%. No potentially dilutive securities other than the convertible bonds were outstanding during 2018. Vaughn's diluted earnings per share for 2018 would be (rounded to the nearest penny)

$2.40.

$4.65.

$2.10.

$2.33.

Multiple Choice Question 107

Bramble Corp. purchased Cullumber Company and agreed to give stockholders of Cullumber Company 9300 additional shares in 2020 if Cullumber Companys net income in 2019 is $505000; in 2018 Cullumber Companys net income is $525000. Bramble Corp. has net income for 2018 of $456000 and has an average number of common shares outstanding for 2018 of 94000 shares. What should Bramble report as diluted earnings per share for 2018? (rounded to the nearest penny)

$4.08

$4.85

$5.37

$4.41