Selected information for Webster Corporation at December 31, 20x8, is presented below: Long-term debt: Notes payable, 14%
Question:
Selected information for Webster Corporation at December 31, 20x8, is presented below:
Long-term debt:
Notes payable, 14% ……………………………………………………... $1,000,000
8% convertible bonds payable ………………………………………..… 2,500,000
10% convertible bonds payable ………………………………….…..… 2,500,000
Total …………………………………………………………………….…. 6,000,000
Stockholders’ equity:
10% cumulative preferred stock, par value $100;
100,000 shares authorized, 25,000 shares issued
And outstanding ……………………………………………….….. $2,500,000
Common stock, par $1, 5,000,000 shares authorized,
625,000 shares issue, 600,000 outstanding ………………….... 625,000
Additional paid-in capital ……………………………………………………. 2,000,000
Retained earnings ………………………………………………….……..…. 9,000,000
Treasury stock ……………………………………………………………..... (725,000)
Total ………………………………………………………………….…….. $13,400,000
The following additional information is available:
A chronology of common stock activity for 20x8 is as follows:
1/1 ……. 400,000 shares outstanding
4/1 ……. 125,000 shares issued
8/1 ……. 25,000 shares purchased for the treasury
11/1 …... 100,000 shares issued
-Options were granted in July 20x6 to purchase 50,000 shares of common stock at $20 per share. The average market price of Webster’s common stock during 20x8 was $30 per share.
-Both the 8% and 10% convertible bonds were issued in 20x7 at par. Each $1,000 convertible bond is convertible into 40 shares of common stock.
-The 10% cumulative, convertible preferred stock was issued at the beginning of 20x8 at par. Each share of preferred is convertible into 4 shares of common stock.
-The average tax rate is 40%.
-Preferred dividends were not declared in 20x8.
-Net income was $1,750,000 in 20x8.
-No bonds or preferred stock were converted during 20x8.
Calculate basic and diluted earnings per share for 20x8.
Financial Accounting
ISBN: 978-0135012840
7th edition
Authors: Walter T. Harrison, Charles T. Horngren