afari .111 1:02 PM following partially completed schedule will help you to organ
ID: 2545114 • Letter: A
Question
afari .111 1:02 PM following partially completed schedule will help you to organize the information for this exercise Previous Next Score: 30% Apple Disney ESPN Yahoot Bing Google Yahoo Apple Bing Google Basic Earnings per Share Lyon Company shows the following condensed income statement information for the year ended December 31, 2016: Income before discontinued operations $29,936 Less: Loss from discontinued operations loss (net of income tax) (2,176) $27,760 Lyon declared dividends of $6,000 on preferred stock and $17,280 on common stock At the beginning of 016,10,000 shares of common stock were outstanding. On May 1, 2016, the company issued 2,000 addtional common shares, and on October 31, 2016, tissued a 20% stock dindend on Rs can on a The preferred stock is not convertible Required the 2016 basic earnings per share. If required, round your answer to two decimal places per share 2. Show the 2016 income statement disclosure of basic earnings per share t required, round your answers to two decimal places Income before discontinued operations Loss from discontinued operations (net of income tax) Net income Score 30%Explanation / Answer
Ans. Calculation Basic dividend for the year of 2016
Step 1 : calculation of Weighted Average No of shares = 10000+2000X8/12 = 11334 shares
Net income = 27760
Less: Preference share dividend = 6000
Earning Available for equity = 21760
Basic dividend including Extraoridnary Item= 21760+2176 / 11334 = $2.11 per share
Basic divident excluding extraoridnary item = 21760/11334 = $1.92 per share
2. Income statement for the year of Dec 2016
Net Income = $29936
Less : Loss from Discountinued operation = ($2176)
Net income = $27760
Basic EPS = $1.92
Ans.
Convertable Bond and EPS
1. Calculation of Basic EPS = $44000/10000 = $4.40 per share
Calculation of diluted earning per share
Step : 1 calculation of diluted Earning
Basic Earning = $44000
Add: Intt of convertable debt. = $22400
(400000X8%)(1-.30)
Total diluted Earning = $66400
Step : 2 Calculation of Diluted no of share
Common stock = 10000
Convertable Bond (1000X24) = 24000
Total no of share = 34000
Diluted EPS = 66400/34000 = $1.95
2. Antidilutive Securities are those whose inclusion would cause EPS to $1.95 rather than $4.40 for convertable bond the if converted method alters both the numerator and the denominator of EPS . Therefore it is possible that the inclusion of a security in the calculation would cause EPS to increase. Antidilutive Securities are $1.95 in the calculation because the diluted EPS figure is Intended to present the most diluted earning per share amt.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.