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charle [14.2K]
3 years ago
9

On January 2, 2021, L Co. issued at face value $20,000 of 4% bonds convertible in total into 1,000 shares of L's common stock. N

o bonds were converted during 2021. Throughout 2021, L had 1,000 shares of common stock outstanding. L's 2021 net income was $2,000. L's income tax rate is 25%. No potential common shares other than the convertible bonds were outstanding during 2021. L's diluted earnings per share for 2021 would be:
Business
1 answer:
Eduardwww [97]3 years ago
5 0

Answer:

$1.3

Explanation:

The computation of diluted earnings per share is shown below:-

a. Statement showing adjusted net profit

Net income                                            $2,000

Interest expenses                                  $800

($20,000 × 4%)

Less: Tax relating to interest expense $200

($800 × 25%)

Adjusted Net profit                                 $2,600

b. Statement showing weighted average number of common stock shares

Shares of common stock        1,000

Debentures converted into

common stock shares             1,000

Total number of weighted

shares                                       2,000

Therefore,

Diluted earning per share = Adjusted net profit ÷ Number of weighted average shares

= $2,600 ÷ 2,000

= $1.3

Therefore for computing the diluted earning per share we simply applied the above formula.

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During the current period, Roberts recognized interest expense of $9,400 and paid interest of $9,000 related to its discounted b
VARVARA [1.3K]

Answer:

amortization on discount on BP 400

Explanation:

When there is a difference between the face value and the issuance proceeds from the bond a premium or discount is created.

When the proceeds are above, there will be a premium and the interest expense will be lower thant the actual cash outlay on the bond.

When theface value is above the proceeds, there is a discount.and expenses are higher than cash payment to bondholders.

In this case the expense is higher so there is a discount.

6 0
3 years ago
What is sub-optimization and what organizational characteristics tend to lead to larger sub-optimization problems?
solong [7]

An organizational characteristics that tend to lead to larger sub-optimization problems is continuous focus on optimizing a unit of a business rather than the results of the entire business

<h3>What is Sub-optimization?</h3>

In a firm. the term "Sub-optimization" occurs when there is reduced level of output as a result of an an inefficient or ineffective process or system.

The problem associated with Sub-optimization is that when there is an optimization of outcome for a subsystem, it may not generally optimize the outcome for the system as a whole.

In conclusion, the organizational characteristics that tend to lead to larger sub-optimization problems is continuous focus on optimizing a unit of a business rather than the results of the entire business

Read more about Sub-optimization

<em>brainly.com/question/17083176</em>

7 0
2 years ago
Derk owns 600 shares of stock in Rose Corporation. The remaining 1,400 shares of Rose are owned as follows: 200 by Derk's daught
Norma-Jean [14]
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8 0
3 years ago
Investing $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase demand for your products 3.0% in thi
Neko [114]

Answer:

the payback period is 14 months

Explanation:

The computation of the payback period is shown below:

Profit is

= $2,000,000 - $1,669,426

= $330,574

Now payback period is

= 1 + $330,574 ÷ $1,669,426

= 1 +0.198 years

= 1.198 years

= 14.37 months

= 14 months

Hence, the payback period is 14 months

8 0
3 years ago
Voiles Company reissued 200 shares of its treasury stock. The treasury stock originally cost $25 per share and was reissued for
Naddika [18.5K]

Answer:

The correct option is A,A. 7,000 = NA + 2,000 - (5,000) NA - NA = NA 7.000 FA

Explanation:

By issuing the treasury stock ,asset,cash to be precise increases by $7000($35*200) which implies a debit to the asset ,hence the $7000 seen on the left hand-side of the equation.

This transaction has no liability impact,as a result liabilities is denoted NA,not applicable.

The par value of the treasury is to be credited to treasury stock with $5,000($25*200).

Lastly the difference between the par value and the issue is credited to paid-in capital from treasury stock i.e($35-$25)*200))=$2000,this is depicted by $2000 in the equation

5 0
3 years ago
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