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Here are a number of dilutive share and earnings p...

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Here are a number of dilutive share and earnings per share questions. They are tricky. I have the questions and the answers. I need you to show me how to solve the problems. Thanks! Denise,HI! These problems are challenging. Can you show me how to solve them? Thanks! Denise,Here is the file. Let me know if it doesn't go through. Denise,Here is the file. Let me know if it doesn't go through. Denise,Michael. Did you receive my assignment? Denise,Michael, I'll cut and paste it to you. Denise DILUTIVE SHARE QUESTIONS 99. On January 1, 2011, Gridley Corporation had 125,000 shares of its $2 par value common stock outstanding. On March 1, Gridley sold an additional 250,000 shares on the open market at $20 per share. Gridley issued a 20% stock dividend on May 1. On August 1, Gridley purchased 140,000 shares and immediately retired the stock. On November 1, 200,000 shares were sold for $25 per share. What is the weighted-average number of shares outstanding for 2011? a. 510,000 b. 375,000 c. 358,333 d. 258,333 ANSWER IS B 100. The following information is available for Barone Corporation: January 1, 2011 Shares outstanding 1,250,000 April 1, 2011 Shares issued 200,000 July 1, 2011 Treasury shares purchased 75,000 October 1, 2011 Shares issued in a 100% stock dividend 1,375,000 The number of shares to be used in computing earnings per common share for 2011 is a. 2,825,500. b. 2,737,500. c. 2,725,000. d. 1,706,250. ANSWER IS C 104. Stine Inc. had 300,000 shares of common stock issued and outstanding at December 31, 2010. On July 1, 2011 an additional 300,000 shares were issued for cash. Stine also had stock options outstanding at the beginning and end of 2011 which allow the holders to purchase 90,000 shares of common stock at $28 per share. The average market price of Stine?s common stock was $35 during 2011. The number of shares to be used in computing diluted earnings per share for 2011 is a. 672,000 b. 618,000 c. 522,000 d. 468,000 ANSWER IS D 105. Kasravi Co. had net income for 2011 of $300,000. The average number of shares outstanding for the period was 200,000 shares. The average number of shares under outstanding options, at an option price of $30 per share is 12,000 shares. The average market price of the common stock during the year was $36. What should Kasravi Co. report for diluted earnings per share for the year ended 2011? a. $1.50 b. $1.49 c. $1.43 d. $1.42 ANSWER IS B 106. On January 2, 2011, Worth Co. issued at par $2,000,000 of 7% convertible bonds. Each $1,000 bond is convertible into 10 shares of common stock. No bonds were converted during 2011. Worth had 200,000 shares of common stock outstanding during 2011. Worth?s 2011 net income was $600,000 and the income tax rate was 30%. Worth?s diluted earnings per share for 2011 would be (rounded to the nearest penny): a. $3.49. b. $3.17. c. $3.00. d. $3.36. ANSWER IS B 107. Beaty Inc. purchased Dunbar Co. and agreed to give stockholders of Dunbar Co. 10,000 additional shares in 2012 if Dunbar Co.?s net income in 2011 is $500,000; in 2010 Dunbar Co.?s net income is $520,000. Beaty Inc. has net income for 2010 of $200,000 and has an average number of common shares outstanding for 2010 of 100,000 shares. What should Beaty report as diluted earnings per share for 2010? a. $2.22 b. $2.00 c. $1.82 d. $1.67 ANSWER IS C Use the following information for questions 108 and 109. Hanson Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000 of 10% convertible bonds outstanding during 2011. The preferred stock is convertible into 40,000 shares of common stock. During 2011, Hanson paid dividends of $1.20 per share on the common stock and $4 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2011 was $800,000 and the income tax rate was 30%. 108. Basic earnings per share for 2011 is (rounded to the nearest penny) a. $2.94. b. $3.22. c. $3.35. d. $3.60. ANSWER IS D 109. Diluted earnings per share for 2011 is (rounded to the nearest penny) a. $2.77. b. $2.81. c. $3.05. d. $3.33. ANSWER IS C 110. Fugate Company had 500,000 shares of common stock issued and outstanding at December 31, 2010. On July 1, 2011 an additional 500,000 shares were issued for cash. Fugate also had stock options outstanding at the beginning and end of 2011 which allow the holders to purchase 150,000 shares of common stock at $20 per share. The average market price of Fugate's common stock was $25 during 2011. What is the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2011? a. 1,030,000 b. 870,000 c. 787,500 d. 780,000 ANSWER IS D 111. Shipley Corporation had net income for the year of $480,000 and a weighted average number of common shares outstanding during the period of 200,000 shares. The company has a convertible bond issue outstanding. The bonds were issued four years ago at par ($2,000,000), carry a 7% interest rate, and are convertible into 40,000 shares of common stock. The company has a 40% tax rate. Diluted earnings per share are a. $1.65 b. $2.23. c. $2.35. d. $2.58. ANSWER IS C 113. On January 2, 2010, Perez Co. issued at par $10,000 of 6% bonds convertible in total into 1,000 shares of Perez's common stock. No bonds were converted during 2010. Throughout 2010, Perez had 1,000 shares of common stock outstanding. Perez's 2010 net income was $3,000, and its income tax rate is 30%. No potentially dilutive securities other than the convertible bonds were outstanding during 2010. Perez's diluted earnings per share for 2010 would be (rounded to the nearest penny) a. $1.50. b. $1.71. c. $1.80. d. $3.42. ANSWER IS B 114. At December 31, 2010, Kifer Company had 500,000 shares of common stock outstanding. On October 1, 2011, an additional 100,000 shares of common stock were issued. In addition, Kifer had $10,000,000 of 6% convertible bonds outstanding at December 31, 2010, which are convertible into 225,000 shares of common stock. No bonds were converted into common stock in 2011. The net income for the year ended December 31, 2011, was $3,000,000. Assuming the income tax rate was 30%, the diluted earnings per share for the year ended December 31, 2011, should be (rounded to the nearest penny) a. $6.52. b. $4.80. c. $4.56. d. $4.00. ANSWER IS C 115. On January 2, 2011, Mize Co. issued at par $300,000 of 9% convertible bonds. Each $1,000 bond is convertible into 30 shares. No bonds were converted during 2007. Mize had 50,000 shares of common stock outstanding during 2011. Mize 's 2011 net income was $160,000 and the income tax rate was 30%. Mize's diluted earnings per share for 2011 would be (rounded to the nearest penny) a. $2.71. b. $3.03. c. $3.20. d. $3.58. ANSWER IS B 116. At December 31, 2010, Sager Co. had 1,200,000 shares of common stock outstanding. In addition, Sager had 450,000 shares of preferred stock which were convertible into 750,000 shares of common stock. During 2011, Sager paid $600,000 cash dividends on the common stock and $400,000 cash dividends on the preferred stock. Net income for 2011 was $3,400,000 and the income tax rate was 40%. The diluted earnings per share for 2011 is (rounded to the nearest penny) a. $1.24. b. $1.74. c. $2.51. d. $2.84. ANSWER IS B Use the following information for questions 117 and 118. Lerner Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000 of 10% convertible bonds outstanding during 2011. The preferred stock is convertible into 40,000 shares of common stock. During 2011, Lerner paid dividends of $.90 per share on the common stock and $3.00 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2011 was $600,000 and the income tax rate was 30%. 117. Basic earnings per share for 2011 is (rounded to the nearest penny) a. $2.21. b. $2.42. c. $2.51. d. $2.70. ANSWER IS D 118. Diluted earnings per share for 2011 is (rounded to the nearest penny) a. $2.14. b. $2.25. c. $2.35. d. $2.46. ANSWER IS C 119. Yoder, Incorporated, has 3,200,000 shares of common stock outstanding on December 31, 2010. An additional 800,000 shares of common stock were issued on April 1, 2011, and 400,000 more on July 1, 2011. On October 1, 2011, Yoder issued 20,000, $1,000 face value, 8% convertible bonds. Each bond is convertible into 20 shares of common stock. No bonds were converted into common stock in 2011. What is the number of shares to be used in computing basic earnings per share and diluted earnings per share, respectively? a. 4,000,000 and 4,000,000 b. 4,000,000 and 4,100,000 c. 4,000,000 and 4,400,000 d. 4,400,000 and 5,200,000 ANSWER IS B 120. Nolte Co. has 4,000,000 shares of common stock outstanding on December 31, 2010. An additional 200,000 shares are issued on April 1, 2011, and 480,000 more on September 1. On October 1, Nolte issued $6,000,000 of 9% convertible bonds. Each $1,000 bond is convertible into 40 shares of common stock. No bonds have been converted. The number of shares to be used in computing basic earnings per share and diluted earnings per share on December 31, 2011 is a. 4,310,000 and 4,310,000. b. 4,310,000 and 4,370,000. c. 4,310,000 and 4,550,000. d. 5,080,000 and 5,320,000. ANSWER IS B 121. At December 31, 2010, Tatum Company had 2,000,000 shares of common stock outstanding. On January 1, 2011, Tatum issued 500,000 shares of preferred stock which were convertible into 1,000,000 shares of common stock. During 2011, Tatum declared and paid $1,500,000 cash dividends on the common stock and $500,000 cash dividends on the preferred stock. Net income for the year ended December 31, 2011, was $5,000,000. Assuming an income tax rate of 30%, what should be diluted earnings per share for the year ended December 31, 2011? (Round to the nearest penny.) a. $1.50 b. $1.67 c. $2.50 d. $2.08 ANSWER IS B 122. At December 31, 2010, Emley Company had 1,200,000 shares of common stock outstanding. On September 1, 2011, an additional 400,000 shares of common stock were issued. In addition, Emley had $12,000,000 of 6% convertible bonds outstanding at December 31, 2010, which are convertible into 800,000 shares of common stock. No bonds were converted into common stock in 2011. The net income for the year ended December 31, 2011, was $4,500,000. Assuming the income tax rate was 30%, what should be the diluted earnings per share for the year ended December 31, 2011, rounded to the nearest penny? a. $2.11 b. $3.38 c. $2.35 d. $2.45 ANSWER IS C 123. Grimm Company has 1,800,000 shares of common stock outstanding on December 31, 2010. An additional 150,000 shares of common stock were issued on July 1, 2011, and 300,000 more on October 1, 2011. On April 1, 2011, Grimm issued 6,000, $1,000 face value, 8% convertible bonds. Each bond is convertible into 40 shares of common stock. No bonds were converted into common stock in 2011. What is the number of shares to be used in computing basic earnings per share and diluted earnings per share, respectively, for the year ended December 31, 2011? a. 1,950,000 and 2,130,000 b. 1,950,000 and 1,950,000 c. 1,950,000 and 2,190,000 d. 2,250,000 and 2,430,000 Use the following information for questions 124 and 125. Information concerning the capital structure of Piper Corporation is as follows: December 31, 2011 2010 Common stock 150,000 shares 150,000 shares Convertible preferred stock 15,000 shares 15,000 shares 9% convertible bonds $2,400,000 $2,400,000 During 2011, Piper paid dividends of $1.20 per share on its common stock and $3.00 per share on its preferred stock. The preferred stock is convertible into 30,000 shares of common stock. The 9% convertible bonds are convertible into 75,000 shares of common stock. The net income for the year ended December 31, 2011, was $600,000. Assume that the income tax rate was 30%. ANSWER IS A 124. What should be the basic earnings per share for the year ended December 31, 2011, rounded to the nearest penny? a. $2.66 b. $2.92 c. $3.70 d. $4.00 ANSWER IS C 125. What should be the diluted earnings per share for the year ended December 31, 2011, rounded to the nearest penny? a. $3.20 b. $2.95 c. $2.83 d. $2.35 ANSWER IS B 126. Warrants exercisable at $20 each to obtain 30,000 shares of common stock were outstanding during a period when the average market price of the common stock was $25. Application of the treasury stock method for the assumed exercise of these warrants in computing diluted earnings per share will increase the weighted average number of outstanding shares by a. 30,000. b. 24,000. c. 6,000. d. 7,500. ANSWER IS C,Michael, These problems the explanation is totally missing! Please show the workings on the below problems. Because I paid for them and you should provide them for me today. Denise DILUTIVE SHARE QUESTIONS 99. On January 1, 2011, Gridley Corporation had 125,000 shares of its $2 par value common stock outstanding. On March 1, Gridley sold an additional 250,000 shares on the open market at $20 per share. Gridley issued a 20% stock dividend on May 1. On August 1, Gridley purchased 140,000 shares and immediately retired the stock. On November 1, 200,000 shares were sold for $25 per share. What is the weighted-average number of shares outstanding for 2011? a. 510,000 b. 375,000 c. 358,333 d. 258,333 ANSWER IS B 100. The following information is available for Barone Corporation: January 1, 2011 Shares outstanding 1,250,000 April 1, 2011 Shares issued 200,000 July 1, 2011 Treasury shares purchased 75,000 October 1, 2011 Shares issued in a 100% stock dividend 1,375,000 The number of shares to be used in computing earnings per common share for 2011 is a. 2,825,500. b. 2,737,500. c. 2,725,000. d. 1,706,250. ANSWER IS C 104. Stine Inc. had 300,000 shares of common stock issued and outstanding at December 31, 2010. On July 1, 2011 an additional 300,000 shares were issued for cash. Stine also had stock options outstanding at the beginning and end of 2011 which allow the holders to purchase 90,000 shares of common stock at $28 per share. The average market price of Stine?s common stock was $35 during 2011. The number of shares to be used in computing diluted earnings per share for 2011 is a. 672,000 b. 618,000 c. 522,000 d. 468,000 ANSWER IS D 105. Kasravi Co. had net income for 2011 of $300,000. The average number of shares outstanding for the period was 200,000 shares. The average number of shares under outstanding options, at an option price of $30 per share is 12,000 shares. The average market price of the common stock during the year was $36. What should Kasravi Co. report for diluted earnings per share for the year ended 2011? a. $1.50 b. $1.49 c. $1.43 d. $1.42 ANSWER IS B 106. On January 2, 2011, Worth Co. issued at par $2,000,000 of 7% convertible bonds. Each $1,000 bond is convertible into 10 shares of common stock. No bonds were converted during 2011. Worth had 200,000 shares of common stock outstanding during 2011. Worth?s 2011 net income was $600,000 and the income tax rate was 30%. Worth?s diluted earnings per share for 2011 would be (rounded to the nearest penny): a. $3.49. b. $3.17. c. $3.00. d. $3.36. ANSWER IS B 107. Beaty Inc. purchased Dunbar Co. and agreed to give stockholders of Dunbar Co. 10,000 additional shares in 2012 if Dunbar Co.?s net income in 2011 is $500,000; in 2010 Dunbar Co.?s net income is $520,000. Beaty Inc. has net income for 2010 of $200,000 and has an average number of common shares outstanding for 2010 of 100,000 shares. What should Beaty report as diluted earnings per share for 2010? a. $2.22 b. $2.00 c. $1.82 d. $1.67 ANSWER IS C,Problems 99- 144 are totally missing and I paid $100.00 for help with these problems. Denise . And the explanations are not great on these problems, as was with some help I got in the past,Problems 99- 144 are totally missing and I paid $100.00 for help with these problems. Denise . And the explanations are not great on these problems, as was with some help I got in the past,Problems 99- 144 are totally missing and I paid $100.00 for help with these problems. Denise . And the explanations are not great on these problems, as was with some help I got in the past,Problems 99- 144 are totally missing and I paid $100.00 for help with these problems. Denise . And the explanations are not great on these problems, as was with some help I got in the past,Problem #115 is also missing. Denise,***I apologize, I didn't see the other tab on the worksheet that has the questions 99 - 115! But I do have a question about problem #125. How did you come up with the interest of 151200? I tried plugging a bunch of numbers and I couldn't figure out how you got that number from. Denise,***I have another question, # 104 Stile Inc. I don't see how you came up with $18000 stock options, or "so additional shares = 90000- 72000= 18000." Where does the 72000 come from? Denise,Hey, I looked again at the spreadsheets and everything is OK. Thanks for all the help and you'll be hearing from me again in the near future. Denise

 

Paper#2335 | Written in 18-Jul-2015

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