If bondholders were able to convert their bonds into 6,000 common shares, and company executives had...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
If bondholders were able to convert their bonds into 6,000 common shares, and company executives had exercisable stock options available for an additional 5,000 shares, what would Farmiga's fully diluted EPS be for 2014? (2 marks) Farmiga Inc. Income Statement Year Ended December 31, 2014 Sales Cost of Goods Sold Gross profit Operating expenses Loss on Sale of Equipment Profit from Operations Interest expense Interest revenue Profit before Income Tax Income tax expense Profit $265,500 3,600 5,400 9,900 $1,137,600 772,200 365,400 269,100 96,300 4,500 100,800 25,200 $75,600 Assets Cash Farmiga Inc. Balance Sheet December 31 Accounts Receivable Inventory Long-term Debt Investment Property Plant and Equipment Less: Accumulated Depreciation Liabilities & Shareholder's Equity Accounts Payable Dividends Payable Income Tax Payable Long-term Notes Payable Common Shares Retained Earnings 2014 $120,600 181,800 369,000 176,400 1,008,000 (292,500) $1,563,300 $157,500 10,800 25,200 81,000 1,170,000 118,800 $1,563,300 2013 $176,400 135,000 257,400 0 828,000 (252,000) $1,144,800 $117,000 0 28,800 0 945,000 54,000 $1,144,800 Referring back to Farmiga Inc. Question 4 data, calculate the earnings per share (EPS) for 2014. (2 marks) If bondholders were able to convert their bonds into 6,000 common shares, and company executives had exercisable stock options available for an additional 5,000 shares, what would Farmiga's fully diluted EPS be for 2014? (2 marks) Additional Information: 1 2 3 4 5 Cash Dividends of $10,800 were declared on December 31, 2014, payable January 15, 2015 Along term debt investment was acquired for cash at a cost of $175,500 Depreciation expense is included in the operating expenses. The company issued 22,500 common shares for cash on March 31, 2014. The fair value of the shares were $10 per share. The proceeds were used to purchase additional equipment Equipment that originally cost $45,000 was sold during the year for cash. The equipment had a net book value of $16,200 at the time of sale. 6 The company issued a note payable for $90,000 and repaid $9,000 of it by year end. 7 Accounts Payable is used for Merchandise purchases, Accounts Receivable relate to Sales 8 65,625 shares were outstanding Dec. 31, 2013. 15,625 more common shares were issued Aug 31/2014 9 Westerner Inc. is a private company reporting under ASPE. Required: Prepare a complete Statement of Cash Flow using the Indirect method If bondholders were able to convert their bonds into 6,000 common shares, and company executives had exercisable stock options available for an additional 5,000 shares, what would Farmiga's fully diluted EPS be for 2014? (2 marks) Farmiga Inc. Income Statement Year Ended December 31, 2014 Sales Cost of Goods Sold Gross profit Operating expenses Loss on Sale of Equipment Profit from Operations Interest expense Interest revenue Profit before Income Tax Income tax expense Profit $265,500 3,600 5,400 9,900 $1,137,600 772,200 365,400 269,100 96,300 4,500 100,800 25,200 $75,600 Assets Cash Farmiga Inc. Balance Sheet December 31 Accounts Receivable Inventory Long-term Debt Investment Property Plant and Equipment Less: Accumulated Depreciation Liabilities & Shareholder's Equity Accounts Payable Dividends Payable Income Tax Payable Long-term Notes Payable Common Shares Retained Earnings 2014 $120,600 181,800 369,000 176,400 1,008,000 (292,500) $1,563,300 $157,500 10,800 25,200 81,000 1,170,000 118,800 $1,563,300 2013 $176,400 135,000 257,400 0 828,000 (252,000) $1,144,800 $117,000 0 28,800 0 945,000 54,000 $1,144,800 Referring back to Farmiga Inc. Question 4 data, calculate the earnings per share (EPS) for 2014. (2 marks) If bondholders were able to convert their bonds into 6,000 common shares, and company executives had exercisable stock options available for an additional 5,000 shares, what would Farmiga's fully diluted EPS be for 2014? (2 marks) Additional Information: 1 2 3 4 5 Cash Dividends of $10,800 were declared on December 31, 2014, payable January 15, 2015 Along term debt investment was acquired for cash at a cost of $175,500 Depreciation expense is included in the operating expenses. The company issued 22,500 common shares for cash on March 31, 2014. The fair value of the shares were $10 per share. The proceeds were used to purchase additional equipment Equipment that originally cost $45,000 was sold during the year for cash. The equipment had a net book value of $16,200 at the time of sale. 6 The company issued a note payable for $90,000 and repaid $9,000 of it by year end. 7 Accounts Payable is used for Merchandise purchases, Accounts Receivable relate to Sales 8 65,625 shares were outstanding Dec. 31, 2013. 15,625 more common shares were issued Aug 31/2014 9 Westerner Inc. is a private company reporting under ASPE. Required: Prepare a complete Statement of Cash Flow using the Indirect method
Expert Answer:
Answer rating: 100% (QA)
To calculate the fully diluted earnings per share EPS for Farmiga Inc for 2014 we need to consider the impact of the conversion of bonds and the exerc... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
Students also viewed these accounting questions
-
Fully vested incentive stock options exercisable at $50 per share to obtain 24,000 shares of common stock were outstanding during a period when the average market price of the common stock was $60...
-
What is the difference between basic EPS and fully diluted EPS?
-
Diluted EPS would be precisely the same whether convertible securities were actually converted or not. Why?
-
Below are batting averages of the New York Yankees players who were at bat ve times or more in 2006. (a) Construct a frequency distribution. Explain how you chose the number of bins and the bin...
-
A research firm has been asked to determine the proportion of all restaurants in the state of Ohio that serve alcoholic beverages. The firm wants to be 98% confident of its results but has no idea of...
-
A firm is a natural monopoly. Its marginal cost curve is flat, and its average cost curve is downward sloping (because it has a fixed cost). The firm can perfectly price discriminate. a. In a graph,...
-
What are the steps in the business buying decision process? What happens in each step?
-
Analyzing accounts receivable for two companies The annual reports of Dell, Inc. and Sun Microsystems, two manufacturers of computers, reveal the information below for the current year (amounts in...
-
Hi, I need help with this question: Assume that only two stocks exist: IBM and USX. Their current prices are P0(IBM)=100 and P0(USX)=40 and both stocks have the same beta. The expected dividend on...
-
You are working on a free-form Packet Tracer challenge activity as seen in Figure 1, you have been given the London Railways network.' The purpose of this EMA question is to build upon each of the...
-
Module 39: Calculate the following binary subtractions: (+8) 01000 ? -(+3) - 00011 (+5) (-8) 11000 - (+3) - 00011 (-11) (+8) 01000 - (-3) - 11101 (+11) (-8) 11000 -(-3) - 11101 (-5)
-
A man borrows $700 from a bank. He agrees to pay that amount and interest of 8% per year at the end of 3 years. How much will he owe?
-
What might explain the fund's performance? To what extent do you believe an investment strategy, such as Puglia's, explains performance?
-
Discuss what you understand by the term "marginal costing" and how this can demonstrate making assets work hard for the business, providing 4 examples of this.
-
0000 80 9 00 0010 00 34 91 7d 40 00 80 06 0020 9b 24 c8 51 01 bb 18 c2 77 43 c1 5f 08 00 45 00 00 00 ce a8 00 0e 63 53 f8 11 00 00 00 00 80 02 0030 fa fe bf 54 00 00 02 04 05 b4 01 03 03 08 01 01 04...
-
How did Darlene manage to survive? Was it due to her ability to conserve her body water, or did she somehow gain access to a meager supply of water while still buried?
-
Retail gravitational theory is less useful in defining trading areas for metropolitan areas than in rural areas. Group of answer choices True False
-
Apply Jacobis method to the given system. Take the zero vector as the initial approximation and work with four-significant-digit accuracy until two successive iterates agree within 0.001 in each...
-
Brandon Components declares a 2-for-1 stock split. What will be the effects of the split, and how should it be recorded?
-
Myriad Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $320 million on January 1, 2011 for $283,294,720. The bonds mature in 2021 (10 years). For bonds of similar risk and...
-
Briefly describe the inputs that companies should use when determining fair value. Organize your answer according to preference levels, from highest to lowest priority.
-
How does role ambiguity relate to role conflict?
-
What are the symptoms of eustress (positive stress)?
-
What are some ways employers can reduce stress for their employees?
Study smarter with the SolutionInn App