Blossom Corporation reported net income of $407,000 in 2020 and had 400,000 common shares outstanding throughout...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Blossom Corporation reported net income of $407,000 in 2020 and had 400,000 common shares outstanding throughout the year. On May 1, 2020, Blossom issued 5% convertible bonds. Each $1,000 bond is convertible into 120 common shares. Total proceeds at par amounted to $740,000, and was allocated to the liability and equity components under the residual value method. The liability component was measured first, at present value of the stream of interest payments plus present value of the bond maturity value, all discounted at 8% (the interest rate that applies to similar straight bonds). At the time of issuance, the liability component was recorded at $684,000. Blossom's tax rate is 30%. Calculate Blossom's 2020 diluted earnings per share. (Round answer to 2 decimal places, e.g. 15.25.) Diluted earnings per share %24 Blossom Corporation reported net income of $407,000 in 2020 and had 400,000 common shares outstanding throughout the year. On May 1, 2020, Blossom issued 5% convertible bonds. Each $1,000 bond is convertible into 120 common shares. Total proceeds at par amounted to $740,000, and was allocated to the liability and equity components under the residual value method. The liability component was measured first, at present value of the stream of interest payments plus present value of the bond maturity value, all discounted at 8% (the interest rate that applies to similar straight bonds). At the time of issuance, the liability component was recorded at $684,000. Blossom's tax rate is 30%. Calculate Blossom's 2020 diluted earnings per share. (Round answer to 2 decimal places, e.g. 15.25.) Diluted earnings per share %24
Expert Answer:
Answer rating: 100% (QA)
First we will calculate basic EPS Basic EPS net inc... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Carl transfers land to Cardinal Corporation for 90% of the stock in Cardinal Corporation worth $60,000 and the assumption by Cardinal of a mortgage on the land in the amount of $100,000. The land,...
-
In 2014, I & T Corporation reported net income of $1.6 million, and declared and paid preferred share dividends of $400,000. During 2014, I & T had a weighted average of 120,000 common shares...
-
In 2012, Hollis Corporation reported net income of $1,000,000. It declared and paid preferred stock dividends of $250,000. During 2012, Hollis had a weighted average of 190,000 common shares...
-
Lowell Inc. projects unit sales for a new project with a life of FOUR YEARS as follows: year 1 = Unit sales 10,000 Year 2 = Unit sales 12,000 Year 3 = Unit sales 14,000 Year 4 = Unit sales 16,000...
-
The Retained Earnings, Dividends, and Income Summary accounts for Cindys Beauty Salon, Inc., are shown in T-account forms. The closing entries have been recorded for the year ended December 31, 2011....
-
With reference to the Audit 11.3 case, how would an understanding of the business and management reporting system have contributed to discovery of the open cash receipts journal cutoff error?
-
The relation between a bond's coupon rate and yield rate is known to influence a bond's issuance price. Presented below are coupon rates and yield rates for a selection of corporate bonds. Identity...
-
One of the approaches for the Southern Company to comply with the Clean Air Act is to adopt fuel-switching technology. Do you think this strategic flexibility would have value to Southern Companys...
-
What is a hallmark of major reformations of religion throughout history? Are Western legal policies able to be inspected solely on logic and reasoning? When did major revolutions come into play in...
-
Prepare general journal entry. Billy Bob's Bikes Transactions Nov. 1: Billy Bob paid in advance for an 8-month insurance policy, which will begin today. He paid $3,856 cash for the policy. Nov, 1-...
-
You work for Leonard & Hofstadter, a financial intermediary. The company has written to various clients a total of 12,000 European 5-month call options and 7,000 European 8-month put options on...
-
Being 65 the ascii code of 'A' (capital letter a) and using the following pseudocode to get the hashValue. int hashValue = 0; for (int i = 0; i < 3; i++) { } hashValue += myString[i] 'A'; for (int...
-
Have a table that will show the equivalent effective interest rates to some nominal interest rates with various compounding rates. Put the nominal interest rates of 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%,...
-
What is a public order crime? How do public order crimes differ from other types of crime, as defined by the criminal justice system? How can we improve the ways in which the criminal justice system...
-
In the short run, with a rent ceiling in place, an increase in demand creates a shortage of housing units. Is the shortage remedied as time passes? Why or why not?
-
The following information relates to Preston Financial Services, anaccounting practice. The business specialises in providing accountingand taxation work for dentists and doctors. In the main the...
-
Enumerate how growth - share matrix helps the portfolio business houses to formulate strategies.
-
Eleni Cabinet Company sold 2,200 cabinets during 2011 at $160 per cabinet. Its beginning inventory on January 1 was 130 cabinets at $56. Purchases made during the year were as follows: February . 225...
-
(Entries for Retirement and Issuance of Bonds) Robinson, Inc. had outstanding $5,000,000 of 11% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $7,000,000 of...
-
Target Corporation in 2010 reported net income of $2.5 billion, net sales of $63.4 billion, and average total assets of $44.3 billion. What is Targets asset turnover ratio? What is Targets rate of...
-
Assume that Sonic Foundry Corporation has a contractual debt outstanding. Sonic has available two means of settlement: It can either make immediate payment of $3,500,000, or it can make annual...
-
In what terms are standard variable overhead application rates (SR) usually stated? a. Per dollar b. Per direct labor hour c. Per unit of product d. Per month
-
The gross profit on the interim income statement of a firm using standard costs is computed as: a. Sales less cost of goods sold at standard b. Sales less cost of goods sold at standard plus net...
-
The formula [(Actual Price Standard Price) X Actual Quantity] can be used to calculate which cost variance? a. Variable overhead volume b. Labor efficiency c. Materials efficiency d. Materials price
Study smarter with the SolutionInn App