At December 31, 2019, Bonami Ltd reported the following information: Net income for year: $875,000 (tax...
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At December 31, 2019, Bonami Ltd reported the following information: Net income for year: $875,000 (tax rate is 40%). No dividends were declared during the year. Shareholders equity (all shares are no par value and were issued in 2017): Preferred shares, $0.50, cumulative, convertible, unlimited number authorized, 40,000 shares issued & outstanding. Each pfd share is convertible into two common shares Common shares, unlimited shares authorized, 500,000 shares issued and outstanding (no change during 2019).... Retained Earnings.. Long term liabilities: 8.5% note payable,, due Dec 31, 2022....... 5% convertible bonds (issued at par Sept 30, 2019) 6% convertible bonds (issued at par June 30, 2018) $ 1,200,000 All the bonds have a face value of $1,000. Each bond is convertible into 80 common shares. No bonds were converted during 2019. 6,250,000 2,600,000 Call options were written July 1, 2018, granting the holders the right to purchase 20,000 common shares at $15 per share until Dec 31, 2020. REQUIRED: SHOW ALL CALCULATIONS 500,000 750,000 900,000 Put options were written Sept 1, 2019 granting the holders the right to sell 10,000 common shares at $14 per share until Sept 1, 2020. 1. The average market price of Bonami's common shares during 2019 was $20 per share. No options were exercised during 2019. 2. Calculate basic earnings per share for 2019. Calculate fully diluted earnings per share for 2019. HINT: calculate the incremental effect, one by one, each potentially dilutive security has on basic EPS, and rank from least dilutive to most dilutive. Refer to my notes or text p 766-768 as a guide. At December 31, 2019, Bonami Ltd reported the following information: Net income for year: $875,000 (tax rate is 40%). No dividends were declared during the year. Shareholders equity (all shares are no par value and were issued in 2017): Preferred shares, $0.50, cumulative, convertible, unlimited number authorized, 40,000 shares issued & outstanding. Each pfd share is convertible into two common shares Common shares, unlimited shares authorized, 500,000 shares issued and outstanding (no change during 2019).... Retained Earnings.. Long term liabilities: 8.5% note payable,, due Dec 31, 2022....... 5% convertible bonds (issued at par Sept 30, 2019) 6% convertible bonds (issued at par June 30, 2018) $ 1,200,000 All the bonds have a face value of $1,000. Each bond is convertible into 80 common shares. No bonds were converted during 2019. 6,250,000 2,600,000 Call options were written July 1, 2018, granting the holders the right to purchase 20,000 common shares at $15 per share until Dec 31, 2020. REQUIRED: SHOW ALL CALCULATIONS 500,000 750,000 900,000 Put options were written Sept 1, 2019 granting the holders the right to sell 10,000 common shares at $14 per share until Sept 1, 2020. 1. The average market price of Bonami's common shares during 2019 was $20 per share. No options were exercised during 2019. 2. Calculate basic earnings per share for 2019. Calculate fully diluted earnings per share for 2019. HINT: calculate the incremental effect, one by one, each potentially dilutive security has on basic EPS, and rank from least dilutive to most dilutive. Refer to my notes or text p 766-768 as a guide.
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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