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Leona [35]
3 years ago
9

On June 30, 20X8, Lomond, Inc. issued twenty $10,000, 7% bonds at par. Each bond was convertible into 200 shares of common stock

. On January 1, 20X9, 10,000 shares of common stock were outstanding. The bondholders converted all the bonds on July 1, 20X9. The following amounts were reported in Lomond's income statement for the year ended December 31, 20X9:
Revenues $977,000
Operating expenses $920,000
Interest on bonds $7,000
Income before income tax $50,000
Income tax at 30% $15,000
Net income $35,000

What is Lomond's 20X9 diluted earnings per share?
a. $2.50
b. $2.85
c. $2.92
d. $3.50
Business
1 answer:
salantis [7]3 years ago
7 0

Answer:

c.$ 2.92 per share

Explanation:

The earnings per share is calculated by dividing the net income by the weighted average number of shares outstanding. The bond holders converted their bonds into shares on July 01, 20x9 so their shares were only outstanding for 6 months.

The weighted average number of shares is determined as follows:

January - June                                                                10,000 shares

July December 10,000 + (20 *200= 4,000 shares)      14,000 shares

The weighted average no of shares outstanding is    12,000 shares

The net income                                                           $  35,000

Earnings per share                                                      $ 2.92 per share      

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GalinKa [24]

Solution:

Single factory overhead amount: the amount at which plant overheads or processing overheads are assigned to goods is referred to as single plant overhead rate.

Formula to measure a single plant-wide overhead rate:

Single plant-wide overhead rate :

\frac{Total budgeted factory overhead}{ Total budgeted plant-wide allocation base}  

Different development team overhead rate: this distribution system describes the various divisions engaged in the manufacturing cycle. Factory overheads are assigned to goods on the basis of the overhead cost for each of the manufacturing units.

Formula for calculating various output department overhead:

Multiple production department overhead rate:

\frac{ Budgeted department factory overhead}{ Budgeted department factory overhead}

For calculate: single plant-wide overhead rate use direct working hours (DLH) as the allocation basis, and measure factory overhead.

Using DLH as the allocation basis to measure a single plant-wide overhead limit.

Single plant-wide overhead rate :  \frac{Total budgeted factory overhead}{ Total budgeted plant-wide allocation base}

                                                     = \frac{80,000}{10,000 DLH}

For calculate: single plant-wide overhead rate use direct working hours (DLH) as the allocation basis, and measure factory overhead.

Using DLH as the allocation basis to measure a single plant-wide overhead limit.

4 0
3 years ago
Which statement is false about liquidity?
BARSIC [14]

Answer:

Option D. Both A and B

Explanation:

The reason is that the investment that are readily convertible to cash are less risk and as a result the investors are compensated with lower returns and vice versa. So the only statement that is not false statement is option C and the statement A and B are False.

8 0
3 years ago
A court ruling against the wrongful dismissal of employees is a development in the _____ component of the general
monitta
<span>A court ruling against the wrongful dismissal of employees is a development in the political or legal component of the general. Wrongful dismissal or termination of contract of employment without proper process violates the law of contracts. When this happens, the court takes the employee's rights into consideration in filing damages.</span>
3 0
2 years ago
Multiple Product Performance Report Storage Products manufactures two models of DVD storage cases: regular and deluxe. Presented
Pavlova-9 [17]

Answer:

<u>Flexible budget performance report for the July manufacturing activities</u>

Direct Materials :                                         $62,000

Lumber :

Regular ($6.00 × 5,000) $30,000

Deluxe ($9.00 × 2,000) $18,000

Assembly kit :

Regular ($2.00 × 5,000) $10,000

Deluxe ($2.00 × 2,000) $4,000

Labor :                                                            $30,000

Regular ($4.00 × 5,000) $20,000

Deluxe ($5.00 × 2,000) $10,000

Variable overhead :                                      $15,000

Regular ($2.00 × 5,000)  $10,000

Deluxe ($2.50 × 2,000)   $5,000

Fixed manufacturing overhead                  $13,000

Total                                                             $120,000

Explanation:

A Flexed Budget is a Master budget that has been adjusted to reflect the Actual Level of Operation.

8 0
3 years ago
The following information has been provided by Hale Company: • Advertising expense $8,800; • Interest expense $3,800; • Rent exp
klemol [59]

Answer:

Hale’s total expenses in calculating operating income is $57000

Explanation:

Operating income represents profit realized in carrying out Hale Company primary activities

Only expenses incurred in are considered in calculation of Hale`s Operating Income

<em>Cost of Sales</em>

Cost of goods sold                        22200              

<em>Administration</em>

Rent expenses for store                18000

Depreciation                                    8000

<em>Selling and distribution expenses</em>

Advertising                                       8800

Total Expenses                               57000

6 0
3 years ago
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