Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1 2020, Teal Company issued 10-year $1,860,000 face value, 6% bonds at par. Each $1,000 bond is convertible into 16 shares of Teal

On January 1 2020, Teal Company issued 10-year $1,860,000 face value, 6% bonds at par. Each $1,000 bond is convertible into 16 shares of Teal Common stock. Teal's net income in 2020 was $412,800 and its tax rate was 20%. The company had $96,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. a) Compute diluted earnings per share for 2020. Round answer to 2 decimal places. b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $960,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Teal common stock. Round answer to 2 decimal places.

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

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

Business Accounting Volume 2

Authors: Frank Wood, Alan Sangster

6th Edition

0273039148, 9780273039143

More Books

Students also viewed these Accounting questions