Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on 1/1/2020, sam cuts, inc. had 5,000,000 common s

On 1/1/2020, Sam Cuts, Inc. had 5,000,000 Common Stock and 250,000 $90 15% Convertible Cumulative...

90.2K

Verified Solution

Question

Accounting

On 1/1/2020, Sam Cuts, Inc. had 5,000,000 Common Stock and 250,000 $90 15% Convertible Cumulative Preferred Stock issued and outstanding. Conversion ratio is 5.6:1. Net income of $15,000,000 was reported for the year. Effective income tax rate is 21%. There were no new issue or repurchase of Common Stock and Average Price was $20 in 2020. No dividends were declared for the year. On 2/1/2021, a 3 for 1 Stock Split was declared by the Board of Directors. 100,000 6% $1,000 Convertible Bonds were issued on 4/1/2020 with a conversion ratio of 53:1. 500,000 7% $1,000 Non-Convertible Bonds were issued on 7/1/2020. For the year, there are 2,000 employee stock option and 10,000 institutional put option with strike prices of $18 and $25, respectively.

Compute the a) Basic EPS and b) Diluted EPS for Sam Cuts, Inc. for 2020. Show all calculations.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students