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E16-27B (EPS with Contingent Issuance Agreement)Fremantle Brewing Inc. recently purchased Perth Corp. One of the terms of the merger was that if Perth?s income for 2015 was $500,000 or more, 100,000 additional shares would be issued to Perth?s stockholder

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E16-27B (EPS with Contingent Issuance Agreement)Fremantle Brewing Inc. recently purchased Perth Corp. One of the terms of the merger was that if Perth?s income for 2015 was $500,000 or more, 100,000 additional shares would be issued to Perth?s stockholders in 2016. Perth?s income for 2014 was $480,000.;Instructions;(a) Would the contingent shares have to be considered in Fremantle?s 2014 earnings per share computations?;(b) Assume the same facts, except that Perth?s income for 2014 was $510,000. Would the contingent shares have to be considered in Fremantle?s earnings per share computations for 2014?

 

Paper#78512 | Written in 18-Jul-2015

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