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AC302-Unit 3-prob 16-5

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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, 2012.;FITZGERALD PHARMACEUTICAL;INDUSTRIES;SELECTED BALANCE SHEET;INFORMATION;JUNE 30, 2012;Long-term debt;Notes payable, 9%;$1,067,000;8% convertible bonds payable;5,124,000;9% bonds payable;6,083,000;Total long-term debt;$12,274,000;Shareholders? equity;Preferred stock, 5% cumulative;$54 par value;109,400 shares authorized, 27,350 shares;issued and outstanding;$1,476,900;Common stock, $1;par, 10,050,000 shares authorized;1,005,000 shares issued and outstanding;1,005,000;Additional paid-in capital;4,002,000;Retained earnings;6,016,400;Total shareholders? equity;$12,500,300;The following transactions have also occurred at Fitzgerald.;1.;Options were granted on July 1, 2011, to;purchase 203,800 shares at $17 per share. Although no options;were exercised during fiscal year 2012, the average price per common share;during fiscal year 2012 was $20 per share.;2.;Each bond was issued at face value. The 8% convertible;bonds will convert into common stock at 54 shares per;$1,000 bond. The bonds are exercisable after 5 years and were issued in;fiscal year 2011.;3.;The preferred stock was issued in 2011.;4.;There are no preferred dividends in arrears, however, preferred;dividends were not declared in fiscal year 2012.;5.;The 1,005,000 shares of common stock were outstanding;for the entire 2012 fiscal year.;6.;Net income for fiscal year 2012 was $1,581,000, and the average;income tax rate is 40%.;For the fiscal year ended June 30, 2012, calculate the following for Fitzgerald;Pharmaceutical Industries.(Round the answers to 2;decimal places, e.g. $2.45.)(a)Basic earnings per share.;Basic earnings per share;$;(b) Diluted earnings per share.;Diluted earnings per share;$;Click if you would like to Show Work for this question;Open Show Work

 

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