Reference no: EM132819012
Question - English Bay Limited (EBL), a publically accountable enterprise, reported a net (after tax) Comprehensive Income for 2020 of $3,827,220 which included after tax Other Comprehensive Loss of $500,000. EBL is taxed at 30%.
The company reports the following regarding its debt and equity instruments:
EBL had 2,300,000 Class A shares common shares outstanding at the beginning of the year. On April 1, 2020, the company repurchased and retired 500,000 Class A common shares on the open market at $18 per share.
There are 262,500, $.80 no-par preferred shares outstanding during 2020. These shares are convertible into Class A common shares 2-for-1 at the option of the investor.
900,000, $2 no-par cumulative preferred shares were outstanding at the beginning of the year. The shares are convertible into Class A common shares 3-for-1 (3 common for 1 preferred) at the option of the investor. Dividends become entitled on a quarterly basis.
At the beginning of 2020, 250,000 options were outstanding, allowing senior management to purchase 250,000 Class A common shares for $3.20 per share. On September 1, 2020, 100,000 of the options were exercised, when the market value of the Class A common shares was $19 per share. The average price of the Class A common shares for the first eight months and for the entire year were $12 and $16 per share respectively. The remaining options are still outstanding and will expire in 2024.
There are $3,000,000, 8% of convertible bonds payable outstanding at the beginning of 2020, convertible into Class A common shares at a rate of 34 shares per $1,000 bond, at the option of the investor. Premium amortization on the bonds for the year totalled $41,288.
Common stock cash dividends of $650,000 were declared during the year while no dividends were declared on any preferred share classes is permitted under EBL's Articles of Incorporation. The $2 preferred shares are two years in arrears.
Required - Calculate required EPS disclosures. EBL subscribes to full disclosure of all EPS effects on the face of the income statement.