The Eubanks Corporation held the following potentially dilutive contracts at some point during the fiscal year...

 

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The Eubanks Corporation held the following potentially dilutive contracts at some point during the fiscal year ended December 31, YR7: Par/Face Amount $2,000,000 $3,000,000 8% convertible bonds issued at par 6% convertible, cumulative and nonparticipating preferred stock 7% convertible bonds not issued at par Stock options to purchase 50,000 shares of Common stock at $20 per share (options were granted in YR4 and became fully vested in YR6). Average common stock price during YR7 is $25 per share. Calculate weighted average common shares outstanding. Note 1. Do NOT use a comma (thousands separator). Note 2. Only put a numerator for "months" columnn. Date. • The 7% convertible bonds mature 5 years from the issue date, and were sold when the market rate for these bonds was 8%. Interest on these bonds is payable semi-annually. The company uses the effective interest method to amortize the discount associated with this bond. .Net Income for YR7 = $1,200,000. . Tax rate for YR7 40 %. 1/1-2/1 . No dividends were declared in YR7. . On January 1, YR7, 600,000 shares of Eubanks Corporation common stock were outstanding. On February 1, YR7, the firm issued an additional 100,000 shares of common stock. On November 1, YR7, the firm repurchased 75,000 shares as treasury stock, and on December 1, YR7, the firm declared a 20% stock dividend. 2/1-11/1 11/1-12/1 12/1-12/31 QUESTION 2 Security Shares. Calculate Basic EPS. Round EPS numbers up to the nearest penny. Note 1. Do NOT use a comma (thousands separator). QUESTION 3 Calculate an ME for for the 8% convertible bonds. Note: Do NOT use a comma (thousands separator). Date 1/1/YR6 6/30/YR6 12/31/YR6 6/30/YR7 12/31/YR7 Adj. Factor. Interest PMT ME for the 7% convertible bonds. Months. QUESTION 4 Calculate an ME for for the 6% convertible, cumulative, nonparticipating preferred stock. Note: Do NOT use a comma (thousands separator). QUESTION 7 QUESTION 5 Calculate an ME for the 7% convertible bonds by filling in the effective interest table below. Note 1: Do NOT use a comma (thousands separator). Note 2: Round up to the whole number. QUESTION 6 Calculate an ME for for the stock option. Note: Do NOT use a comma (thousands separator). $1,500,000 Interest Expense QUESTION 6 Calculate an ME for for the stock option. Note: Do NOT use a comma (thousands separator). /12 Calculate a diluted EPS for YR7. Round up to the nearest penny. /12 /12 /12 Date Issued 1/1/YR5 20 shares of common stock for each $1,000 bond 7/1/YR7 3 shares of common stock for each $1,000 of preferred stock 1/1/YR6 40 shares of common stock for each $1,000 bond WA Common Shares Outstanding Conversion Terms Discount on B/P Carrying Value The Eubanks Corporation held the following potentially dilutive contracts at some point during the fiscal year ended December 31, YR7: Par/Face Amount $2,000,000 $3,000,000 8% convertible bonds issued at par 6% convertible, cumulative and nonparticipating preferred stock 7% convertible bonds not issued at par Stock options to purchase 50,000 shares of Common stock at $20 per share (options were granted in YR4 and became fully vested in YR6). Average common stock price during YR7 is $25 per share. Calculate weighted average common shares outstanding. Note 1. Do NOT use a comma (thousands separator). Note 2. Only put a numerator for "months" columnn. Date. • The 7% convertible bonds mature 5 years from the issue date, and were sold when the market rate for these bonds was 8%. Interest on these bonds is payable semi-annually. The company uses the effective interest method to amortize the discount associated with this bond. .Net Income for YR7 = $1,200,000. . Tax rate for YR7 40 %. 1/1-2/1 . No dividends were declared in YR7. . On January 1, YR7, 600,000 shares of Eubanks Corporation common stock were outstanding. On February 1, YR7, the firm issued an additional 100,000 shares of common stock. On November 1, YR7, the firm repurchased 75,000 shares as treasury stock, and on December 1, YR7, the firm declared a 20% stock dividend. 2/1-11/1 11/1-12/1 12/1-12/31 QUESTION 2 Security Shares. Calculate Basic EPS. Round EPS numbers up to the nearest penny. Note 1. Do NOT use a comma (thousands separator). QUESTION 3 Calculate an ME for for the 8% convertible bonds. Note: Do NOT use a comma (thousands separator). Date 1/1/YR6 6/30/YR6 12/31/YR6 6/30/YR7 12/31/YR7 Adj. Factor. Interest PMT ME for the 7% convertible bonds. Months. QUESTION 4 Calculate an ME for for the 6% convertible, cumulative, nonparticipating preferred stock. Note: Do NOT use a comma (thousands separator). QUESTION 7 QUESTION 5 Calculate an ME for the 7% convertible bonds by filling in the effective interest table below. Note 1: Do NOT use a comma (thousands separator). Note 2: Round up to the whole number. QUESTION 6 Calculate an ME for for the stock option. Note: Do NOT use a comma (thousands separator). $1,500,000 Interest Expense QUESTION 6 Calculate an ME for for the stock option. Note: Do NOT use a comma (thousands separator). /12 Calculate a diluted EPS for YR7. Round up to the nearest penny. /12 /12 /12 Date Issued 1/1/YR5 20 shares of common stock for each $1,000 bond 7/1/YR7 3 shares of common stock for each $1,000 of preferred stock 1/1/YR6 40 shares of common stock for each $1,000 bond WA Common Shares Outstanding Conversion Terms Discount on B/P Carrying Value

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Answer 1 Basic EPS or Simple EPS NEt income earned preferred dividend weighted average number of shares outstanding YR7 Net income 1200000 Common stoc... View the full answer