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Q Inc. issued $ 2,000,000 par value, 10-year, 9% convertible bonds on January 1, 2018 at a $ 18,000 discount . Q Inc. reported net
- Q Inc. issued $ 2,000,000 par value, 10-year, 9% convertible bonds on January 1, 2018 at a $ 18,000 discount . Q Inc. reported net income (30% tax rate) of $ 1,600,000 for calendar 2020, and an average of 500,000 common shares outstanding during the year.. The bonds are convertible into 60,000 common shares. Barker uses the straight-line method for amortizing the bond discount.Required :
Calculate basic and diluted earnings per share for 2020.
2, On January 1, 2019, C Corp. acquired a machine for $ 200,000. It is to be depreciated straight line over five years, with no residual value. Because of a bookkeeping error, no depreciation was recognized in C's 2019 financial statements. The oversight was discovered during the preparation of C's 2020 financial statements.Required:
- Calculate the Depreciation expense on this machine for 2020
- How should you record the 2019 depreciation and why?
- How will you inform the users of the Financial Statements of this error.
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