Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please provide work and answers in spreadsheet format. Thank you very much! ABC Corp. reported net income of $1,692,900 for 2017. ABC's income tax rate

Please provide work and answers in spreadsheet format. Thank you very much!

image text in transcribed

ABC Corp. reported net income of $1,692,900 for 2017. ABC's income tax rate was 30% and they reported no below the line items on their income statement. ABC had 400,000 shares of common stock outstanding at1/01/17, issued an additional 300,000 shares on 7/1/17, and purchased 90,000 treasury shares on 11/1/17. The average market price of ABC's stock during 2017 was $50. Throughout 2017 ABC also had the following securities outstanding: 20,000 shares of $100 par value 6% cumulative preferred stock (annual preferred dividend requirement of $6/share). Each preferred share is convertible into 3 shares of common stock. $10,000,000 of 8% bonds payable issued at face value. Each $1,000 bond is convertible into 20 shares of common stock. c. Stock warrants to purchase 160,000 shares of ABC Corp. common stock for $40/share. Required 1. Calculate basic EPS for 2017 (show your work - answer should be $2.94/share), 2. Determine diluted EPS for 2017 (in formulating your answer, provide the "incremental effect" on the EPS numerator and denominator for each of the potentially dilutive securities a, b and c above)

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

Fundamental financial accounting concepts

Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward

8th edition

978-007802536, 9780077648831, 0078025362, 77648838, 978-0078025365

More Books

Students also viewed these Accounting questions

Question

what are the role and responsibilities of change manager?

Answered: 1 week ago

Question

What is a verb?

Answered: 1 week ago