Answer:
a) diluted earnings per share = 0
Explanation:
Diluted earnings per share (DEPS) is a recalculation of the basic EPS. The difference between DEPS and EPS is, EPS represents the current position of earnings per share. No changes in number shares and/or earnings in the future are incorporated in the basic EPS.
Whereas DEPS is a representation of not only the current position of earnings and shares but also includes the commitments an entity has already made whose occurrence may result in an increase/decrease in the amount of earnings and/or number of shares. For example, in the question Culver Company has issued 10-year convertible bonds which right now have no impact on basic EPS but if in the future these bond holders exercise their right of conversion, this would result in an increase in number of ordinary shares hence decreasing/diluting the basic EPS. The entities use DEPS to show shareholders the impact of such commitments on the basic EPS to improve their decision making.
So in 2017 none of the bonds were converted therefore no diluted earnings per share is calculated in 2017.
If all of the bonds were converted in 2017 the DEPS would have been calculated as follows:
The formula for calculating DEPS is as follows;
DEPS = (Net income + interest savings) ÷ number of ordinary shares + increase in ordinary shares as a result of conversion.
Tax savings as a result of conversion=$128400 ($2140000×6%). Because if bond holders convert into ordinary shares then Culver company will not have to pay them interest and hence the amount of interest is saved.
Increase in ordinary shares upon conversion= 29960 ($2140000÷$1000=2140 bonds. Each bond is convertible into 14 shares therefore, 2140×14=29960).
Now Lets calculate DEPS as follows;
DEPS = ($296000+$128400) ÷ 91000+29960
DEPS =$424400÷120960
DEPS = $3.5
Answer and Explanation:
The computation is shown below:
a.
The amount of the adjusting entry for bad debt expense should be
= $45,000 + $5,400
= $50,400
The journal entry should be
Bad Debt Expense Dr. 50,400
To Allowance for Doubtful Accounts Cr. 50,400
(Being the bad debt expense is recorded)
b.
Accounts Receivable 675,000
Allowance for Doubtful Accounts 45,000
Bad Debt Expense 50,400
c.
Accounts Receivable 675,000
Less: Allowance for Doubtful Accounts (45,000)
Net realizable value of accounts receivable 630,000
I believe your answer would be C. Speech and Debate. Being a lawyer requires lots of debate, and speech to support your answer and make it more clear.
Answer:10.06 %
Explanation:
WACC = (Cost of equity × weight of equity ) + (Cost of debt × weight of debt)
Cost of equity = 0.17
Cost of debt = pretax cost of debt × (1 - tax rate )
0.06 × 0.52 = 0.0312
Weight of debt and equity = $3 / $6 = $0.5
WACC = ( 0.17 × 0.5 ) + (0.52×0.06 × 0.5) = 0.085 + 0.0156 = 0.1006 = 10.06%