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grigory [225]
3 years ago
10

Computing Basic and Diluted Earnings per Share Soliman Corporation began the year 2018 with 25,000 shares of common stock and 5,

000 shares of convertible preferred stock outstanding. On May 1, an additional 9,000 shares of common stock were issued. On July 1, 6,000 shares of common stock were acquired for the treasury. On September 1, the 6,000 treasury shares of common stock were reissued. The preferred stock has a $4 per share dividend rate, and each share may be converted into 2 shares of common stock. Soliman Corporation’s 2018 net income is $230,000.
Required
a. Compute earnings per share for 2018. Round your answer to two decimal places.
b. Compute diluted earnings per share for 2018. Round your answer to two decimal places.
Business
1 answer:
Pepsi [2]3 years ago
7 0

Answer:

Soliman Corporation

1. Basic EPS

= $6.18 per share

2. Diluted EPS

= $5.23 per share

Explanation:

a) Data and Calculations:

Convertible Preferred Stock = 5,000 or 10,000 Common Shares

Common Stock:

January 1, 2018 =                  25,000

May 1, 2018 Issued                 9,000

July 1, 2018 Treasury            (6,000)

September 1, 2018 Treasury 6,000

Total outstanding                34,000

Converted preferred stock 10,000

Total outstanding               44,000

2018 Net Income =    $230,000

Preferred dividend        20,000 ($4 * 5,000)

Income for Common $210,000

Basic Earnings per share = $210,000/34,000 = $6.18

Diluted Earnings per share = $230,000/44,000 = $5.23

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Read 2 more answers
Crane Enterprises reported cost of goods sold for 2020 of $1,290,700 and retained earnings of $4,708,100 at December 31, 2020. C
Grace [21]

Answer:

  • Adjusted Cost of Goods sold = $1,206,860
  • Adjusted Retained Earnings = $4,675,190

Explanation:

An overstated opening inventory would overstate Cost of Goods sold. The overstatement should therefore be removed from the Cost of goods sold.

An overstated closing inventory would understate Cost of Goods sold. The overstatement should therefore be added to the Cost of Goods sold.

Adjusted Cost of Goods sold 2020 = Cost of Goods sold + 2020 ending inventory - 2019 opening inventory

= 1,290,700 + 32,910 - 116,750

= $1,206,860

Adjusted Retained earnings

The retained earnings would have to be adjusted for the overstatement of the current inventory by $32,910 because this understated Cost of Goods sold.

= Retained earnings - Overstatement of inventory

= 4,708,100 - 32,910

= $4,675,190

8 0
2 years ago
On February 1, 2019, the balance of the retained earnings account of Blue Power Corporation was $315,000. Revenues for February
Pani-rosa [81]

Answer:

The retained earnings balance on February 28, 2019 is $305.000.

Explanation:

Balance of the retained earnings account on February 1, 2019 = $315,000

Revenue for February 2019 = $61,000

Expenses for February 2019 = $65,000

Dividend declared in February 2019 = $6,000

Net Income = Revenue - Expenses = 61,000 - 65,000 = -4,000

Ending Balance of Retained Earning = Beginning balance of retained earning + net Income - dividend =

Ending Balance of Retained Earning = $315,000 + (-4000) - $6,000

Ending Balance of Retained Earning = $305,000

The retained earnings balance on February 28, 2019 is $305.000.

6 0
3 years ago
A proposed nuclear power plant will cost $2.2 billion to build and then will produce cash flows of $300 million a year for 15 ye
pochemuha

Answer:

Project NPV at 5% discount rate = $1346 .78

Project NPV at 18% discount rate = -597.4

Explanation:

Below is the given values:

Initial cost = $2.2 billion

Yearly cash inflow, A = $300 million

Time = 15 years

Salvage value, S = $900

Project NPV at 5% discount rate = A (P/A, 5%, 15) + S (P/F, 5%, 15) - Initial cost

Project NPV at 5% discount rate = 300 (P/A, 5%, 15) + 900 (P/F, 5%, 15) - $2.2 billion

Project NPV at 5% discount rate = 300 (10.3796) + 900 (0.4810) - $2.2 billion or 2200 million

Project NPV at 5% discount rate = $1346 .78

Now,

Project NPV at 18% discount rate = 300 (5.0915) + 900 (0.0835) - $2.2 billion or 2200 million

Project NPV at 18% discount rate = -597.4

4 0
3 years ago
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