Calculate diluted earnings per share

Assignment Help Financial Accounting

Reference no: EM13128360

On January 1, 2012, Lindsey Company issued 10-year, $3,000,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Lindsey common stock. Lindsey’s net income in 2013 was $240,000, and its tax rate was 40%. The company had 100,000 shares of common stock outstanding throughout 2012. None of the bonds were converted in 2012.

(a) Compute diluted earnings per share for 2012.

(b) Compute diluted earnings per share for 2012, assuming the same facts as above, except that $1,000,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Lindsey common stock.

Reference no: EM13128360

Questions Cloud

Design calculator simulation to estimate probability : Design a calculator simulation to estimate the probability described in (a). Describe your simulation method clearly enough so that a classmate could carry it out without further explanation from you.

Illustrate what amount of the proceeds should be allocated : Mouser Company issues 4,000 shares of its $5 par value common stock having a market value of $25 per share and 6,000 shares of its $15 par value preferred stock having a market value of $20 per share for a lump sum of $192,000. Illustrate what am..

Description of intermolecular forces : Description of Intermolecular forces, What parts of the calcium chloride are attracted to what parts of the water molecule when calcium chloride dissolves

Calculate the equilibrium concentration of cl2o(g) : Calculate the equilibrium concentration of Cl2O(g) if 1.0 g of H2O(g) and 2.0 g of Cl2O(g) are mixed in a 1.0-liter flask.

Calculate diluted earnings per share : Calculate diluted earnings per share for 2012, assuming the same facts as above, except that $1,000,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Lindsey common sto..

Probability of obtaining exactly two defective components : From the shipment you take a random sample of 20. When sampling with replacement (binomial), determine the probability of obtaining: Exactly two defective components in the sample of 20.

Residual income for the boxed candy division : The purchase of Truffles Inc. will require an investment of $800,000 and with the synergy between the two companies will increase the Boxed Candy Division's operating income by $76,000. The residual income for the Boxed Candy Division after the pu..

Derivatives-maxima-minima : Write and equation of the tangent line to the graph of y = f(x) at the point on the graph where x has the indicated value. f(x) = (3x^2 + 5x + 4)(4x + 3), x=0

What is the partial molar volume of the ethanol : At 25 0C the density of a 50 % (by mass) ethanol/water solution is 0.914 g/cc. Given that the partial molar volume of water in the solution is 17.4 cc/mol.

User Account

All Pages