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schepotkina [342]
2 years ago
12

On January 2, 2009, L Co. issued at par $20,000 of 4% bonds convertible in total into 1,000 shares of L's common stock. No bonds

were converted during 2009. Throughout 2009, L had 1,000 shares of common stock outstanding. L's 2009 net income was $2,000. L's income tax rate is 50%.No potential common shares other than the convertible bonds were outstanding during 2009.L's diluted earnings per share for 2009 would be :A. $1.00.B.$1.20.C. $1.40.D. $2.00.
Business
1 answer:
MrRissso [65]2 years ago
4 0

Answer:

The correct answer is $1.2 per share.

Explanation:

According to the scenario, the computation of the given data are as follows:

Interest expense of Bonds = $20,000 × 4% = $800

Now, Interest expense of Bond, After tax = $800 × ( 1 - 50%) = $800 × 0.50

= $400

So, we can calculate the diluted earning by using following formula:

Diluted Earning = (Net income + Interest expense after tax) ÷ Total outstanding shares outstanding

Where, Total outstanding shares = 1,000 shares + 1,000 shares = 2,000 shares

By putting the value, we get

Diluted earning = ($2000 + $400 ) ÷ 2,000

= $1.2 per share

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Consider the following financial statements about DANIEL Co. for the current year 2015
neonofarm [45]

Answer:

a.  For the Year Ended December 31, 2015

Cash flows from operating activities:  

Cash received from customers                15586

Cash paid to suppliers                              -10260  

Cash paid for operating expenses           -3910

Cash paid for interest                                -220

Cash paid for income taxes                       -560

Net cash flow from operating activities      636

<u>Working: </u>

Sales                                                       16000

Less: Increase in accounts receivable -380

Less: Decrease in unearned revenue   -34

Cash received from customers             15586

Cost of goods sold                                 10000

Add: Decrease in accounts payable      360

Less: Decrease in inventory                    -100

Cash paid to suppliers                             10260

Operating expenses                                 4000

Less: Noncash expenses  

Depreciation expense                                -150

Impairment loss                                          -200

Cash operating expenses                          3650

Add: Increase in prepaid expenses           80

Add: Decrease in accrued liabilities           180

Cash paid for operating expenses             3910

Interest expense                               200

Add: Decrease in interest payable  20

Cash paid for interest                      220

Income tax expense                               600

Less: Increase in income tax payable   -40

Cash paid for income taxes                   560

(b)        Partial Cash Flow Statement (Indirect Method)

             For the Year Ended December 31, 2015

Cash flows from operating activities

Net income                                                  1200

Adjustments to reconcile net

income to operating cash flows:  

Depreciation expense                   150  

Impairment loss                              200  

Increase in accounts receivable -380  

Decrease in inventory                     100  

Increase in prepaid expenses       -80  

Decrease in accounts payable      -360  

Decrease in accrued liabilities       -180  

Decrease in interest payable         -20  

Decrease in unearned revenue      -34  

Increase in income tax payable      40              -564

Net cash flow from operating activities          636

4 0
2 years ago
Southern Markets has sales of $78,400, net income of $2,400, costs of goods sold of $43,100, and depreciation of $6,800. What is
Helen [10]

Answer:

36.35%

Explanation:

According to the scenario, computation of the given data are as follows,

Sales = $78,400

Net income = $2,400

Cost of goods sodl = $43,100

Depreciation = $6,800

So, we can calculate the EBIT value by using following formula:

= EBIT ÷ Sales

= ($78,400  - $43,100 - $6,800) ÷ ($78,400)

= $28,500 ÷ $78,400

= 36.35%

Hence, the common-size statement value of EBIT is 36.35%

3 0
2 years ago
Laurey Inc. is working on its cash budget for May. The budgeted beginning cash balance is $45,000. Budgeted cash receipts total
Morgarella [4.7K]

Answer:

The company needs to borrow $10,000

Explanation:

First, let us state the information given clearly:

Beginning cash balance = $45,000

total cash receipt = $129,000

total cash disbursement = $124,000

desired ending cash balance = $60,000

Next Let us calculate the net cash available after the period's transactions:

Net available cash from transactions = total receipt - total disbursements

= 129,000 - 124,000 = $5,000

Next we were told that the beginning balance = $45,000

This means that without borrowing ;

the net ending cash balance = Net available cash from transactions + beginning cash balance = 5,000 + 45,000 = $50,000

Finally, we are told that the desired ending cash balance = $60,000, and the amount of cash available = $50,000, therefore to meet up the target, the amount that needs to be borrowed is calculated thus:

desired ending cash = available cash + borrowed amount

60,000 = 50,000 + borrowed amount

∴ borrowed amount = 60,000 - 50,000 = $10,000

hence the company needs to borrow $10,000

3 0
3 years ago
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