In 2024, Bluewater Company issued, at par, 60 $1,000, 7% bonds, each convertible into 100 shares...

Transcribed Image Text:

In 2024, Bluewater Company issued, at par, 60 $1,000, 7% bonds, each convertible into 100 shares of common stock. Bluewater had revenues of $17,300 and expenses other than interest and taxes of $7,800 for 2025. (Assume that the tax rate is 20%.) Throughout 2025, 2,200 shares of common stock were outstanding; none of the bonds was converted or redeemed. (a) Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Earnings per share $ (b) Assume the same facts as those assumed for part (a), except that the 60 bonds were issued on September 1, 2025 (rather than in 2024), and none have been converted or redeemed. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Earnings per share $ (c) Assume the same facts as assumed for part (a), except that 20 of the 60 bonds were actually converted on July 1, 2025. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Earnings per share $ The information below pertains to Alaska Fish Company for 2026. Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock $1,200,000 1,960,000 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 3,930,000 Common stock, $10 par value 6,190,000 Tax rate for 2026 20% Average market price of common stock $25 per share There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 74,900 shares of common stock at $20 per share. a. Compute basic earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) Basic earnings per share b. Compute diluted earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share In 2024, Bluewater Company issued, at par, 60 $1,000, 7% bonds, each convertible into 100 shares of common stock. Bluewater had revenues of $17,300 and expenses other than interest and taxes of $7,800 for 2025. (Assume that the tax rate is 20%.) Throughout 2025, 2,200 shares of common stock were outstanding; none of the bonds was converted or redeemed. (a) Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Earnings per share $ (b) Assume the same facts as those assumed for part (a), except that the 60 bonds were issued on September 1, 2025 (rather than in 2024), and none have been converted or redeemed. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Earnings per share $ (c) Assume the same facts as assumed for part (a), except that 20 of the 60 bonds were actually converted on July 1, 2025. Compute diluted earnings per share for 2025. (Round answer to 2 decimal places, e.g. 2.55.) Earnings per share $ The information below pertains to Alaska Fish Company for 2026. Net income for the year 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock $1,200,000 1,960,000 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 3,930,000 Common stock, $10 par value 6,190,000 Tax rate for 2026 20% Average market price of common stock $25 per share There were no changes during 2026 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 74,900 shares of common stock at $20 per share. a. Compute basic earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) Basic earnings per share b. Compute diluted earnings per share for 2026. (Round answer to 2 decimal places, e.g. 2.55.) Diluted earnings per share