1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
pickupchik [31]
3 years ago
6

Selected information from Gerrard, Inc.’s financial activities in the year 2004 was as follows: Net income was $330,000. The tax

rate was 40%. 700,000 shares of common stock were outstanding on January 1. The average market price per share was $6 in 2006. Dividends were paid in 2006. 2,000 shares of 8% $500 par value preferred shares, convertible into common shares at a rate of 200 common shares for each preferred share, were issued in 2005. 200,000 shares of common stock were issued on March 1. Gerrard, Inc.’s diluted earnings per share (diluted EPS) was closest to:
Business
1 answer:
ValentinkaMS [17]3 years ago
8 0

Answer:

$0.26

Explanation:

diluted earnings per share (EPS) = (net income - preferred dividends) / (weighted average outstanding shares + diluted shares)

net income = $330,000

preferred dividends = 2,000 x $500 x 8% = $80,000. Since the preferred stocks are convertible, they will be considered diluted shares. Therefore, no preferred dividends will be included in the calculation.

weighted average outstanding shares:

  • January 1 = 700,000 x 12/12 = 700,000
  • March 1 = 200,000 x 10/12 = 166,666.7
  • total weighted average = 866,666.7

diluted shares = 2,000 preferred stocks x 200 = 400,000

diluted EPS = $330,000 / (866,666.7 + 400,000) = $0.260526247 ≈ $0.26

You might be interested in
Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-st
eduard

Answer:

<u>Part a</u>

Blossom Company

Income statement for the year 2014 - multiple-step form

                                                                                                            $000

Sales revenue                                                                                   97,088

Less Cost of goods sold                                                                   (61,158)

Gross Profit                                                                                        35,930

Less Operating Expenses :

<u>Administrative expense</u>

Officers' salaries                                                           5,488

Depreciation of office furniture and equipment         4,548         (10,036)

<u>Selling expense :</u>

Delivery expense                                                         3,278

Sales commissions                                                      8,568

Depreciation of sales equipment                               7,068          (18,914)

Operating Income (Loss)                                                                  6,980

Less Non Operating Expenses :

Income tax                                                                     9,658

Interest expense                                                            2,448      (12,106)

Net Income (Loss)                                                                            (5,126)

<u>Part b</u>

Blossom Company

Income statement for the year 2014 - single-step form

                                                                                                            $000

Sales revenue                                                                                   97,088

Less Cost of goods sold                                                                   (61,158)

Gross Profit                                                                                        35,930

Less Expenses :

Officers' salaries                                                          5,488

Depreciation of office furniture and equipment        4,548        

Delivery expense                                                         3,278

Sales commissions                                                      8,568

Depreciation of sales equipment                               7,068        

Income tax                                                                    9,658

Interest expense                                                          2,448         (41,056)

Net Income (Loss)                                                                             (5,126)

Explanation:

The multiple-step form shows the Operating Income and Net Income separately by grouping expenses as either operating and non-operating expenses.

The single-step form shows all expenses under one category and no grouping of expenses as either operating or non-operating.

4 0
3 years ago
14. Over a given year, nominal GDP increased by about 2.5%. Over that year, the GDP deflator decreased by about 4%. From this in
Mama L [17]
The answer is 1,009 and thats your answer
8 0
2 years ago
Finding out how a product or service will do in a certain market is an example of this use of market research: identify if commu
Veseljchak [2.6K]

Answer:

identify value

Explanation:

Finding out how a product or service will do in a certain market is an example of this "IDENTIFY VALUE" market research. This will help the producers understand and know what the consumers want and the degree of value they placed on their products.

identify if communications are effective is used determine who the consumers are and the type of media preferred.

identify if consumer needs are being met is used to determine what customers like or dislike about a product or service.

identify threats and investigate the competition is used to determine changes in consumer preferences and competition

8 0
3 years ago
What is the difference between Nepalese microeconomics and macroeconomics?
dangina [55]
Microeconomics study of particular markets, and segments of the economy. It looks at issues like consumer behavior, individuals labor markets, and film theory. Macroeconomics is the study of the whole economy. It looks at aggregate variables, such as aggregate demand, national output and inflation!!!
8 0
3 years ago
If an excise tax is imposed on restaurant meals, a. fewer meals will be produced and sold b. more meals will be produced and sol
solniwko [45]

Answer:

Correct option is (a)

Explanation:

Excise tax is an indirect tax which is not imposed on customers directly. Excise tax is imposed on producers or sellers for goods produced and they in turn transfer the burden of tax on customers in the form of higher prices. That is why, it is called indirect tax.

It is usually imposed on those goods such as liquor and tobacco whose consumption the Government needs to decrease. If excise tax is imposed on restaurant meals, then the restaurant will be able to produce and sell less at the same price it was charging earlier. If the restaurant wishes to sell more, then it will have to charge higher price.

6 0
3 years ago
Other questions:
  • Mandy has perfected the art of glass-blowing. She has made gifts for her friends for years and has always gotten rave reviews. S
    7·1 answer
  • Which of the following total cost functions suggests the presence of a natural​ monopoly?
    15·1 answer
  • How are envelopes and letterhead different? information included
    15·1 answer
  • A major accounting contribution to the managerial decision-making process in evaluating possible courses of action is to a. assi
    10·1 answer
  • The Hudson Corporation has 7,600 obsolete units of a product that are carried in inventory at a manufacturing cost of $152,000.
    15·1 answer
  • Use the following information for questions 6 and 7. Wonderland Company imports and sells a product produced in Canada. In the s
    13·1 answer
  • Watunga County Bank agrees to lend Vaughn Granite Company $599000 on January 1. Vaughn Granite Company signs a $599000, 8%, 9-mo
    6·1 answer
  • Edison's Lights makes light bulbs. The company is currently producing well below its full capacity. Lamp Land has approached Edi
    10·1 answer
  • Sunland Company uses the periodic inventory system. For the current month, the beginning inventory consisted of 477 units that c
    10·1 answer
  • Loyal customers and proprietary bread both fall within which part of the swot analysis?
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!