Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

On 01-01-19, Smith had 732,000 shares of common stock outstanding. On 08-01-19, Smith issued 72,000 shares of its common stock. Smith's net income for the

On 01-01-19, Smith had 732,000 shares of common stock outstanding. On 08-01-19, Smith issued 72,000 shares of its common stock. Smith's net income for the year ended 12-31-19 was $1,200,000. Smith's income tax rate is 25%. During 2019, Smith declared and paid dividends on its 60,000 shares of its 8%, $100 par value, convertible preferred stock. Each share of the convertible preferred stock can be converted, at the discretion of the stockholder, into 6 shares of Smith's common stock. As of 12-31-19, Smith had $4,000,000 of 4% convertible bonds. Smith issued the bonds at face value during 2012. The bonds can be converted into 600,000 shares of Smith's common stock. What will Smith report as its diluted earnings per share for the year ended 12-31-19?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

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

Contemporary Human Resource Management Text And Cases

Authors: Tom Redman, Adrian Wilkinson

4th Edition

9780273757825

Students also viewed these Accounting questions