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ACC - Karen Company had 105,000 shares of common stock outstanding

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Question;Karen Company had 105,000 shares of common stock outstanding on;January 1, 2011. On August 30, 2011, Karen sold 50,000 shares of common stock;for cash. Karen also had 11,000 shares of convertible preferred stock;outstanding throughout 2011. The preferred stock is $105 par, 5%, and is;convertible into 4 shares of common for each share of preferred. Karen also had;400, 8%, convertible bonds outstanding throughout 2011. Each $1,000 bond is;convertible into 35 shares of common stock. The bonds sold originally at par.;Reported net income for 2011 was $350,000 with a 35% tax rate. The regular;common and preferred dividends were paid in 2011.

 

Paper#40624 | Written in 18-Jul-2015

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