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Vikki [24]
3 years ago
11

On June 1, 2018, Crane Company and Cheyenne Company merged to form Ayayai Inc. A total of 876,000 shares were issued to complete

the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 637,000 shares of stock for cash. All 1,513,000 shares were outstanding on December 31, 2020. Ayayai Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 44 shares of common at any interest date. None of the bonds have been converted to date. Ayayai Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,491,000. (The tax rate is 20%.)
Determine the following for 2020.
(a) The number of shares to be used for calculating:
(1) Basic earnings per share
(2) Diluted earnings per share
(b) The earnings figures to be used for calculating:
(1) Basic earnings per share
(2) Diluted earnings per share
Business
1 answer:
katrin2010 [14]3 years ago
4 0

Answer:

A-1 Basic earnings per share=$1,353,750

A-2 Diluted earnings per share = 2,136,650

B-1 Basic earnings per share $1,491,000

B-2 Diluted earnings per share= $1,510,200

Explanation:

(a)Calculation of number of shares to be used for calculating

(1) Basic earnings per share = (876,000*3/12) + (1,513,000*9/12)

Basic earnings per share=$219,000+$1,134,750

Basic earnings per share=$1,353,750

Therefore Basic earnings per share is $1,353,750

(2) Diluted earnings per share = (876 000*3/12) (1,513,000*3/12) + (1,513,000 + ($600000/$1000 * 44)

Diluted earnings per share =219,000+378,250+(1,513,000+26,400)

Diluted earnings per share =219,000+378,250+1,539,400

Diluted earnings per share = 2,136,650

Therefore Diluted earnings per share is 2,136,650

(b) Calculation of earnings figures to be used for

(1) Calculation to determine the Basic earnings per share

Using this formula

Basic earnings per share = Net income after tax

Let plug in the formula

Basic earnings per share= $1,491,000

Therefore Basic earnings per share is $1,491,000

(2) Calculation to determine Diluted earnings per share

First step is to calculate the interest expense after tax adjustment

Interest Savings ($600000 * 8% * ½) $24000

Additional Tax ($24000 * 20%) $4800

Interest expense after tax adjustment $19,200

Now let calculate the Diluted earnings per share

Using this formula

Diluted earnings per share = Net income + interest expense after tax adjustment

Let plug in the formula

Diluted earnings per share= $1,491,000 +$19,200

Diluted earnings per share= $1,510,200

Therefore Diluted earnings per share is $1,510,200

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Pepper Company provided the incomplete financial statements shown below as well as the following additional information: 1. All
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The missing amounts on the company's financial statements include the current asset of $880000, quick asset is $400000 and an inventory of $480000.

<h3>How to calculate the asset?</h3>

Based on the information given, it should be noted that the current assets will be:

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In the long run, once people have had time to adjust their long-term commitments, an increase insupply and a higher price level
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Product prices will be increased by resource price. A further explanation is given below.

Explanation:

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4 0
3 years ago
Adnan Hassan earned 5% commission as a sales trainee. After
wel

Answer:

He earns $296780 as a Sales Trainee and $377094 as a Sales Associate

<em />

Explanation:

Given

Let x represents his sales as a sales trainee

Let x represents his sales as a sales associate

Total Sales: x + y = 673874

Total Commission: 0.05x + 0.08y = 45006.52

Required

Find x and y

Equations

x + y = 673874 --- (1)

0.05x + 0.08y = 45006.52 --- (2)

Make  y the subject of formula in (1)

x + y = 673874

y = 673874 - x

Substitute this in (2)

0.05x + 0.08y = 45006.52

0.05x + 0.08(673874 - x) = 45006.52

Open Bracket

0.05x + 53909.92 - 0.08x = 45006.52

Collect Like Terms

0.05x  - 0.08x = 45006.52 - 53909.92

- 0.03x = -8903.4

Divide through by -0.03

x = \frac{-8903.4}{-0.03}

x = 296780

Recall that

y = 673874 - x

y = 673874 - 296780

y = 377094

<em>Hence;</em>

<em>He earns $296780 as a Sales Trainee and $377094 as a Sales Associate</em>

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