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You are the controller of Thessaionic Wholesale Limited ( TWL ) , a public company, and you have accumulated the following for the purpose of
You are the controller of Thessaionic Wholesale Limited TWL a public company, and you have accumulated the following for the purpose of computing earnings per share information for the year ended December :
The common share rollforward schedule showed the following:
# of Shares Recorded Value
January Beginning Balance $
March New shares issued cash
May Stock options exercised by employees
December Ending balance $
The employee stock options that were exercised, as shown above, were granted in and vested in TWL received $ upon exercise of these options.
Additional employee stock options are outstanding at December as follows: stock options exercisable in at $ per option; stock options exercisable in $ per option. All of these additional stock options were granted in and vested in One stock option is entitled to acquire one common share, adjusted for any stock splits.
There are preferred shares outstanding at December These preferred shares are cumulative and have a stated annual dividend of $ per share. The preferred shares are convertible into common shares, at the option of the holder, at a rate of four common shares for each preferred share. These preferred shares have been outstanding since
Bonds with a face value of $ were issued to an investor, at a discount, on September The bonds are convertible into common shares at the option of the investor at the rate of common shares for $ bond. The interest expense on these bonds for was $ which includes $ of discount amortization.
Dividends declared and paid during the year were $ The dividends were paid entirely to preferred shareholders. Of the $ of dividends, $ was paid to settle arrears from and while $ was paid in respect of
The average price of the common shares during was fairly constant and averaged $ per common share while the average price for the preferred shares during was fairly constant and averaged $ per preferred share.
Net income for was $ There were no discounted operations during The tax rate for is
Required:
Compute basic earnings per share for Show your work. marks
Compute diluted earnings per share for Show your work clearly. marks
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