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Question;Exercise 16-25;On January 1, 2012, Lindsey Company;issued 10-year, $3,081,000 face value, 6% bonds, at par. Each $1,000 bond is;convertible into 25 shares of Lindsey common stock. Lindsey?s net income in;2012 was $282,000, and its tax rate was 45%. The company had 101,000 shares of;common stock outstanding throughout 2012. None of the bonds were converted in;2012.;(a) Compute diluted earnings per share for;2012. (Round answer to 2 decimal places, e.g. $2.55.);Diluted earnings per share;$;(b) Compute diluted earnings per share for;2012, assuming the same facts as above, except that $1,010,000 of 6%;convertible preferred stock was issued instead of the bonds. Each $100;preferred share is convertible into 10 shares of Lindsey common stock. (Round answer to 2 decimal places, e.g. $2.55.);Diluted earnings per share;$;----------------------------------------------------------------------------------------------------------------------;Exercise 16-19;A portion of the statement of income and;retained earnings of Pierson Inc. for the current year follows.;Income before extraordinary item;$19,840,000;Extraordinary loss, net of applicable;income tax (Note 1);1,383,000;Net income;18,457,000;Retained earnings at the beginning of;the year;83,310,000;101,767,000;Dividends declared;On preferred stock?$6.00 per share;$306,000;On common stock?$1.75 per share;14,180,000;14,486,000;Retained earnings at the end of the;year;$87,281,000;Note 1. During the year, Pierson Inc. suffered a;major casualty loss of $1,383,000 after applicable income tax reduction of;$1,210,000.;At the end of the current year, Pierson;Inc. has outstanding 8,273,000 shares of $11 par common stock and 51,000 shares;of 6% preferred.;On April 1 of the current year, Pierson;Inc. issued 1,071,000 shares of common stock for $33 per share to help finance;the casualty.;SOLVE FOR;Pierson Inc.;Income Statement;For the year ended;December 31, 2012;$;$;$;----------------------------------------------------------------------------------------------------------------------;Exercise 16-8;On September 1, 2012, Jacob Company sold;at 104 (plus accrued interest) 4,200 of its 9%, 10-year, $1,000 face value;nonconvertible bonds with detachable stock warrants. Each bond carried two;detachable warrants. Each warrant was for one share of common stock at a;specified option price of $16 per share. Shortly after issuance, the warrants;were quoted on the market for $3 each. No fair value can be determined for the;Jacob Company bonds. Interest is payable on December 1 and June 1. Bond issue;costs of $35,400 were incurred.;Prepare in general journal format the;entry to record the issuance of the bonds. (Credit account;titles are automatically indented when amount is entered. Do not indent;manually. If no entry is required, select "No entry" for the account;titles and enter 0 for the amounts.);Account Titles and Explanation Debit Credit;$______________ $;$______________ $;$______________ $;$______________ $;$______________ $;$______________ $;Exercise 16-6;On January 1, 2011, Trillini Corporation;issued $4,450,000 of 10-year, 8% convertible debentures at 104. Interest is to;be paid semiannually on June 30 and December 31. Each $1,000 debenture can be;converted into 9 shares of Trillini Corporation $102 par value common stock;after December 31, 2012.;On January 1, 2013, $890,000 of;debentures are converted into common stock, which is then selling at $114. An;additional $890,000 of debentures are converted on March 31, 2013. The market;price of the common stock is then $120. Accrued interest at March 31 will be;paid on the next interest date.;Bond premium is amortized on a;straight-line basis.;Make the necessary journal entries for;(a);December 31, 2012.;(c);March 31, 2013.;(b);January 1, 2013.;(d);June 30, 2013.;No Account Titles and Explanations Debit Credit;(a) _________________________ $______________ $;$______________ $;$______________ $;(b) _________________________ $______________ $;$______________ $;$______________ $;$______________ $;(c) _________________________ $______________ $;$______________ $;$______________ $;(to record;interest expense);$______________ $;$______________ $;$______________ $;$______________ $;(to record conversion);(d _________________________ $______________ $;$______________ $;$______________ $;$______________ $

 

Paper#41472 | Written in 18-Jul-2015

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