Percy Company has 15,000 shares of common stock outstanding during all of 2013. It also has 2

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Percy Company has 15,000 shares of common stock outstanding during all of 2013. It also has 2 convertible securities outstanding at the end of 2013. These are:

1. Convertible preferred stock: 1,000 shares of 9%, $100 par, preferred stock were issued in 2012 for $140 per share. Each share of preferred stock is convertible into 3.5 shares of common stock. The current dividends have been paid. To date, no preferred stock has been converted.

2. Convertible bonds: Bonds with a face value of $100,000 and an interest rate of 10% were issued at par on July 6, 2013. Each $1,000 bond is convertible into 35 shares of common stock. To date, no bonds have been converted.

Percy earned net income of $54,000 during 2013. Its income tax rate is 30%.

Required:

Compute the 2013 diluted earnings per share. What earnings per share amount(s) would Percy report on its 2013 income statement?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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Related Book For  answer-question

Intermediate Accounting Reporting and Analysis

ISBN: 978-1111822361

1st edition

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

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