Amy Dyken, controller at Fitzgerald Pharmaceutical Industries, a public company,

Question

Amy Dyken, controller at Fitzgerald Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Fitzgerald’s financial statements. Below is selected financial information for the fiscal year ended June 30, 2014.

FITZGERALD PHARMACEUTICAL INDUSTRIES
SELECTED BALANCE SHEET
INFORMATION
JUNE 30, 2014

$1,193,000

5,190,000

6,055,000

$12,438,000

$1,415,400

1,004,900

4,005,800

6,005,200

$12,431,300

The following transactions have also occurred at Fitzgerald.

6. Net income for fiscal year 2014 was $1,591,000, and the average income tax rate is 40%.

For the fiscal year ended June 30, 2014, calculate the following for Fitzgerald Pharmaceutical Industries. (Round answers to 2 decimal places, e.g. $2.45.)

(a) Basic earnings per share.

(b) Diluted earnings per share.

FITZGERALD PHARMACEUTICAL INDUSTRIES
SELECTED BALANCE SHEET
INFORMATION
JUNE 30, 2014

Long-term debt    Notes payable, 9%

$1,193,000

8% convertible bonds payable

5,190,000

   9% bonds payable

6,055,000

     Total long-term debt

$12,438,000

Shareholders’ equity    Preferred stock, 6% cumulative, $56 par value,   101,100 shares authorized, 25,275 shares issued and outstanding

$1,415,400

   Common stock, $1 par, 10,049,000 shares authorized,   1,004,900 shares issued and outstanding

1,004,900

   Additional paid-in capital

4,005,800

   Retained earnings

6,005,200

     Total shareholders’ equity

$12,431,300

Explanation / Answer

a.

1.49873221

b.

Particulars BASIC EPS Net Income (after tax ) (a)               1,591,000 Less: Preference Dividend (6% ) 84924 Profit available to Equity Share holders ©=(a)-(b) 1506076 Number of Shares Outstanding during 2014               1,004,900 Conversion of 8% convertible bond in to Common Stock (51,90,000/1000)                          -   Increase in Shares due to grant of Stock option ( Refer Note below)                          -   Total no of Common Stocks Outstanding during the year               1,004,900 Earning per Share

1.49873221

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.