The information below pertains to Swifty Company for 2018. Netincome for the year $1,250,000...

50.1K

Verified Solution

Question

Accounting

The information below pertains to Swifty Company for 2018. Netincome for the year $1,250,000 7% convertible bonds issued at par($1,000 per bond); each bond is convertible into 30 shares ofcommon stock 2,000,000 6% convertible, cumulative preferred stock,$100 par value; each share is convertible into 3 shares of commonstock 3,840,000 Common stock, $10 par value 6,270,000 Tax rate for2018 40% Average market price of common stock $25 per share Therewere no changes during 2018 in the number of common shares,preferred shares, or convertible bonds outstanding. There is notreasury stock. The company also has common stock options (grantedin a prior year) to purchase 81,600 shares of common stock at $20per share. (a) Compute basic earnings per share for 2018. (Roundanswer to 2 decimal places, e.g. $2.55.) Basic earnings per share $(b) Compute diluted earnings per share for 2018. (Round answer to 2decimal places, e.g. $2.55.)

Answer & Explanation Solved by verified expert

3.6 Ratings (421 Votes)

SolutionGiven informationNet income 1250000Common stock 10 par value 6270000 10 627000Common stock 10 par value 627000preffered dividend 3840000 6 230400preffered dividend 23040030 See Answer

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

Transcribed Image Text

In: AccountingThe information below pertains to Swifty Company for 2018. Netincome for the year $1,250,000 7%...The information below pertains to Swifty Company for 2018. Netincome for the year $1,250,000 7% convertible bonds issued at par($1,000 per bond); each bond is convertible into 30 shares ofcommon stock 2,000,000 6% convertible, cumulative preferred stock,$100 par value; each share is convertible into 3 shares of commonstock 3,840,000 Common stock, $10 par value 6,270,000 Tax rate for2018 40% Average market price of common stock $25 per share Therewere no changes during 2018 in the number of common shares,preferred shares, or convertible bonds outstanding. There is notreasury stock. The company also has common stock options (grantedin a prior year) to purchase 81,600 shares of common stock at $20per share. (a) Compute basic earnings per share for 2018. (Roundanswer to 2 decimal places, e.g. $2.55.) Basic earnings per share $(b) Compute diluted earnings per share for 2018. (Round answer to 2decimal places, e.g. $2.55.)