Ju Tletmedlate Accounting Fall 17 Kathi Wagner 15/19/17 me Homework: Chapter 20
ID: 2576101 • Letter: J
Question
Ju Tletmedlate Accounting Fall 17 Kathi Wagner 15/19/17 me Homework: Chapter 20 Homework Score: 0.87 of 10 pts til 1of2(1 complete) HW Score: 4 35%, 087 of 2 E20-8 (book/static) Question Help Stewart Stamping began the current year with 400,000 common shares outstanding and issued an additional 150,000 shares on S bonds outstanding for a full year (e., $250,000 coupon interest per year), which are convertible into 325,000 shares of common stock The frm issued the bonds at par and did not convert any dunng the current year i also had $1,150 000 par value, 3% no convertible, nona ulat e pret red s ock outstanding for e 1 year and de e d de ds f the year The company is subject to a 40% effective tax rate and net income is S3 500000 Assume that the sa so oo net income rap tednu en soooo tenon as anna eptember 1. Te frm has S10 000 000 2 5% convert re ork operations, net of tax nt ptsRequirement a. Based on this information, compute basic and diluted earnings per share (EPS) for the current year Read the requirements Begin with the basic eamings per share for income from continuing operations. (Round the EPS to the nearest cent, SX.xx) Basic EPS from income trom continuing operations for the current year is $943 Calculate the basic earnings per share for net income. (Round the EPS to the nearest cent, sx.xx) Basic EPS from net income for the current year is 20-8 7.70 the diluted eamings per share for income trom continuing operations. (Round the EPS to the nearest cent, sxcx) Diluted EPS trom income from continuing operations for the current year iss urse (AC 2017 ght Check Answer Enter any number in the edit fields and then click Check Answer Clear All remaining oeExplanation / Answer
Stewart Stamping BASIC EPS Continuing Operations Includes Loss from discontinuing operations Net Income 4280000 3500000 Less Prefered dividend 34500 34500 Net Income 4245500 3465500 No. of shares outstanding 450000 450000 Basic EPS 9.43 7.70 Continuing Operations Net Income 4280000 Less Prefered dividend 34500 Net Income 4245500 Add : Interest net of tax 150000 Adjusted Net Income 4395500 No. of shares Outstanding =450000+325000 775000 Diluted EPS 5.67
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