to your QUESTION 4 Paul Company had 100,000 shares of common stock outstanding o

Question

to your QUESTION 4 Paul Company had 100,000 shares of common stock outstanding on January 1, 2018. On September 30, 2018, Paul sold 48,000 shares of common stock for cash. Paul also had 10,000 shares for each share of preferred. Pud also had 500,896. stock outstanding throughout 2018. The preferred stock is $100 par, 6%, and is convertible into 3 shares of outstanding theoughout 2018. Each $1,000 bond is convertible into 30 shares of common stock. The bonds sold originally at face value. Reported net income for 2018 was 6 5

Explanation / Answer

Paul Company Computation of Basic & Diluted earning per share for the year Numerator Denominator     = Earnings per share Weighted average No. of common stock in denominator Basic 240000 112000     = 2.14 Product Diluted 324000 157000     = 2.06 100000 9 Months 900000 148000 3 Months 444000 Total 1344000 Note Calculation of Numerator for diluted earning per share Divide by 12 months 112000 Net Income attributable to common stockholders 240000 =300000-60000 Add : Preferred dividend 60000 =10000*100*6% Add Interest Net of taxes 24000 =(500*1000*8%)*(100%-40%) Total adjusted Net Income=Numerator 324000 Calculation of denominator for diluted earning per share

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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