Answer:
a)
Cash debit : $150000
Debit discount on BP : $65000
Credit BP : $185000
Credit Paid-in Capital- Stock Warrants : $30000
b)
Cash debit : $150000
Debit discount on BP : $35000
Credit BP : $185000
Explanation:
Given that:
Issuance price = $150000, value of bonds without warrants = $126400, value of warrants = $31600,
Face value = $185000
a)
value assigned to bonds= [value of bonds without warrants/(value of bonds without warrants + value of warrants)] * issue price = [126400/(126400 + 31600)] * 1500000 = 126400 / 158000 * 150000 = $120000
value assigned to warrants = [value of warrants/(value of bonds without warrants+value of warrants)] * issue price = 31600 / (126400 + 31600) * 150000 = 31600 / 158000 * 150000 = $30000
Cash debit = Issuance price = $150000
Debit discount on BP = Face value - value assigned to bonds = $185000 - $120000 = $65000
Credit BP = face value = $185000
Credit Paid-in Capital- Stock Warrants = value assigned to warrants = $30000
b)
Cash debit = Issuance price = $150000
Debit discount on BP = Face value - issuance price = $185000 - $150000 = $35000
Credit BP = face value = $185000
Answer:
EPS will be higher than $2.38
Explanation:
The Earnings per share is the value available to stockholders of the company after the deduction of all the expense and taxes. Restructuring expense are one time expense and they are reported as other operating expenses in the Income Statement. The inclusion of restructuring and other one-time charges in the Income Statement results in lower Earnings before Tax and ultimately reduced net profit. If these cost are excluded the Earning will rise which will give rise to EPS of the company.
Answer:
$24,25
Explanation:
Cost per unit (Variable Costing) = Variable manufacturing costs
= Direct Materials + Direct Labor + Variable Overheads
= $ 9.00+$ 8.50+$ 6.75
= $24,25
Therefore, the total production cost per unit under variable costing if 25,000 units had been produced is $24,25
Answer:
Option (b) is correct.
Explanation:
(a) Net Income:
= Revenues - Expenses
= $77,000 - $48,600
= $ 28,400
(b) Retained earnings :
= Net Income - Dividend
= $ 28,400 - $7,700
= $20,700
(c) Stockholders' Equity:
= Total assets - Total Liabilities
= 185,000 - $105,000
= $80,000
Therefore, the retained earnings at December 31, 2016 were $20,700.
