Calculate income effect of the dividends on preferred shares

Assignment Help Financial Accounting
Reference no: EM132984503

Question - Crane Corporation is preparing earnings per share data for 2020. The net income for the year ended December 31, 2020 was $410,000 and there were 58,500 common shares outstanding during the entire year. Crane has the following two convertible securities outstanding:

10% convertible bonds (each $1,000 bond is convertible into 20 common shares) $114,0004% convertible $100 par value preferred shares (each share is convertible into 2 common shares) $55,000

Both convertible securities were issued at face value in 2017. There were no conversions during 2020, and Crane's income tax rate is 23%. The preferred shares are cumulative. For simplicity, ignore the requirement to record the debt and equity components of the bonds separately.

Calculate the income effect of the dividends on preferred shares.

Reference no: EM132984503

Questions Cloud

How much is the balance of allowance for loan impairment : On January 1, 2020, Tigreal Bank granted a 10%, P3,000,000 loan to Kagura Company. How much is the balance of allowance for loan impairment
Explain why a study of labour relations is important : Explain why a study of labour relations is important to a prospective relations practioner
What is the growth rate of the expected annual dividend : Compute the current dividend yield. What is the growth rate of the expected annual dividend after year two? Assume the required rate of return is 15%
What is the inventory turnover : The quick ratio is 1.7 while the current ratio is 2.5. The current liabilities amount to 5000. Cost of Goods sold is 52500. What is the inventory turnover
Calculate income effect of the dividends on preferred shares : The net income for the year ended December 31, 2020 was $410,000. Calculate income effect of the dividends on preferred shares
What is the maximum purifier should pay for intelair : The all-inclusive cost of sensor production is $700/unit. Purifier currently uses a discount rate of 10%. What is the maximum Purifier should pay for IntelAir
Find the amount of joint costs allocated : Assuming no further processing work is done after the split off point, the amount of joint costs allocated to commercial building lumber (CBL)
What is the sale price : Problem - An item that normally sells for $220 is marked down by 40%. What is the sale price
What qualitative factors would colin consider : Colin received an order for 1,000 coffee tables. What qualitative factors would Colin consider before he decides to buy the tabletop or make it

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is the value of the shareholders equity account

Sankey, Inc. has current assets of $4,900, net fixed assets of $25,000, current liabilities of $4,100, and long-term debt of $10,300. What is the value of the shareholder’s equity account for this firm? How much is net working capital?

  What will be paying as monthly mortgage payments

What will you be paying as monthly mortgage payments (principal and interest only)? (Do not round intermediate calculations and round your final answer)

  How many deposits must be placed at the beginning

How many deposits of P48,000 must be placed at the beginning of each month if money accumulates at the interest rate of 6% compounded monthly?

  Dividends recieved by the common stockholders in 2017

In 2017, $60000 of dividends are declared and paid. What are the dividends recieved by the common stockholders in 2017?

  How would total assets and shareholder equity be affected

If the original payment were recorded as a prepaid asset, how would total assets and shareholder's equity be affected during 2019?

  Calculate the ending balance of retained earning after stock

Calculate the ending balance of retained earnings after the stock dividend. Common shares, unlimited shares authorized, 28,000 shares issued

  Account for a contract modification as a new contract

A company must account for a contract modification as a new contract if

  Explain what is risk in context of financial decision making

Explain What is risk in the context of financial decision making? What is the relationship between risk and return? Explain the topic in detail.

  Fairness and reasonablennes of paula accounting policies

Discuss the fairness and reasonablennes of paula accounting policies - revenue was recognized when cash was reveived from customers. most customers paid in cash but fer customers purchased and were allowed to pay in 30 days.

  Discussing book value of common stock

In discussing book value of common stock, which statement below is not correct? Book value is also referred to as total equity of the firm.

  How much will be in the avvount at the end

How much will be in the avvount at the end of 8 years in interest is compounded Semi- annually and Continuously and Monthly

  Determine the company WACC

Smith Bros. has the following capital structure: They issued 300,000 shares of stock at $20. Determine the company's WACC

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd