Part 11 (10 m3 1 2 3 -- Hespler Corp. had the following capital structure at January 1, 2018. 4 5 -- 8% bonds payable, $1,000 face value each, convertible into 80 common shares each $4,000,000 $5 dividend, cumulative preferred shares, no par value, convertible into a common share each, 10,000 shares outstanding $3,000,000 Common shares, no par value, 200,000 share outstanding $3,000,000 Page 2: 7 6 00 -- Options Series A: 10,000 employee stock options were outstanding, each option allowing the employee to acquire one common share at $50, vesting December 31, 2020 9 Net income for 2018 was $1,250,000 and the company's tax rate was 25%. The company declared and paid preferred share dividends amounting to $100,000 which included 1 year of dividends in arrears. The average market price of the company's common shares for 2018 was $80. Page 3 12 11 10 Question 8 (9 points) Calculate diluted EPS for Hespler Corp for the year ended December 31, 2018 Show al calculations Page 1: 1 2 On January 1, 2016, C vurporation purchased a building to use as ils factory, and some equipmu it to mani us product. The following information was determined at the tir 3 -- purchase: Cost Useful Life 4 5 Building $2,250,000 20 years Residual Value Depreciation Double $450,000 Declining $95,000 Straight Line Equipment $950,000 25 years Page 2 6 7 8 On January 1, 2019, Crane decided to change the depreciation method for the building to the straight-line method, as a result of a change in the pattern of benefits received. There was no change to the total useful life or the residual value of the building -- 9 Crane also decided that the equipment would have a total useful life of only 13 years, with a residual value of only $46,000. The depreciation method for the equipment did not change. Prepare the journal entries to record depreciation for both assets for 2019. Page 3: 12 11 Question 10 (2 points) 10 What type of change is (i) the change relating to the building and (i) the change relating to the equipment? wag2: Question 11 (4 points) 6 7 8 Calculate 2019 depreciation expense and provide the journal entry (if any) that should be recorded in 2019 to reflect the changes relating to (i) the Building and (in) the Equipment 9 Page 3 V 11 12 10 ce