JACK Mchen

In 2019, Carla Enterprises issued, at par, 60 $1,000, 8% bonds, each convertible into 100 shares of common stock. Carla had reve

dimulka [17.4K]

Answer:

Diluted earnings per share for 2020. is 93 cents

Explanation:

Diluted Earnings per share shows the future position of the Earnings per shareholders once the potential shareholders begin exercising their rights.

Potential Shareholders exists due to Financial Instruments that might be converted into ordinary shares. Examples are Convertible Bonds, Options, Convertible Preference shares.

Step 1 Calculate Basic Earnings Per Share

Basic Earnings Per Share = Earnings Attributable to Ordinary Shareholders / Weighted Average Number of Ordinary Shares in Issue during the period.

Profits attributable to Ordinary Shareholders :

Earnings ( $14,700 - $6,900) $7,800

Less After tax Interest on Bonds (60×$1,000×8%×80%) ( $3,840)

Profits attributable to Ordinary Shareholders $ 3960

Weighted Average Number of Ordinary Shares

Common stock outstanding 2,400 shares

Basic Earnings Per Share = $ 3960/ 2,400

= 165 cents

Step 2 Calculate Diluted Earnings Per Share

Diluted Earnings Per Share = Adjasted Basic Earnings per Share Earnings/ Adjasted Number of Ordinary Shares

Adjusted Basic Earnings per Share Earnings

Profits attributable to Ordinary Shareholders $ 3960

Add Savings on Interest (60×$1,000×8%×80%) $3,840

Adjusted Basic Earnings per Share Earnings $7,800

Adjusted Number of Ordinary Shares

Common stock outstanding 2,400 shares

Add 60× 100 shares of Convertible Bonds 6,000 shares

Adjusted Number of Ordinary Shares 8,400 shares

Diluted Earnings Per Share = $7,800/8,400 shares

= 93 cents

7 0

3 years ago

Payment for the early retirement of long-termbonds payable (carrying amount $370,000) $375,000Distribution in Year 2 of cash div

klasskru [66]

Answer:

Cash used for financing activities 356,000

Explanation:

extinguish of bonds payable (375,000)

preferred dividends (31,000)

proceeds from TS 50,000

Cash used for financing activities 356,000

The conversion do nt involve cash, so it is not included in the cash flow statement.

The carrying ammount, gain and losses are not relevant for the cash flow statement.

We have to focus in the cash movements only.

7 0

3 years ago

What is the current yield on a zero coupon bond with a remaining life of 4 years, a yield to maturity of 10.8%, and a par value

Tanya [424]

Answer:

$663.5

Explanation:

given that

number of years remaining = 4 years

yield to maturity ratio = 10.8% = 1.108

Par value = $1000

Current yield takes a look at the current price of a bond, instead of looking at it from a face value. That being said, it can be calculated mathematically as

Current yield = 1000 / 1.108^4

Current yield = 1000 / 1.507

Current yield = $663.5

Therefore, the current yield from the question we are given, is found to be $663.5.

I hope that helps

8 0

3 years ago

A company bases its predetermined overhead rate on direct labor cost. For next year, total factory overhead cost is estimated at

AlekseyPX

Answer:

Allocated MOH= $18,750

Explanation:

Giving the following information:

The estimated total factory overhead= $300,000

Total estimated direct labor cost= $240,000.

The actual direct labor cost was $15,000.

First, we need to calculate the estimated overhead rate based on direct labor cost. Then, we can allocate overhead.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 300,000/240,000= $1.25 per direct labor dollar

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 1.25*15,000

Allocated MOH= $18,750

3 0

3 years ago

Power and performance sports are dominant today because they do not foster the interests of people and organizations with the re

o-na [289]

I believe that statement is false

It's the other way around. Since sports able to attract the interest of large number of people, it attract interest of many organizations that feel that they can financially benefited from the audiences. Which is why you would constantly see massive advertisements displayed on the sports field or on the players' jersey.

6 0

3 years ago