Reference no: EM132917231
Questions -
Q1. On January 1, 2015, Easy Street Co. had 50,000 shares of common stock outstanding. On April 1, the corporation issued 20,000 new shares to raise additional capital.
On June 1, the corporation declared and issued a 3-for-1 stock split.
On December 1, the corporation purchased on the market 15,000 of its own outstanding shares and retired them.
Compute the weighted average number of shares to be used in computing earnings per share for 2015.
Q2. Copacabana Tours, Inc. issued 3,000 $1,000 bonds at 105. Each bond was issued with two detachable stock warrants. After issuance, the bonds were selling in the market at 103, and EACH warrant had a market price of $75.
Use the proportional method to record the issuance of the bonds and warrants.
Q3. Pacific Sailing Co.'s (PSC) net income in 2020 was $600,000, and its tax rate was 25%. The company had 150,000 shares of common stock outstanding throughout 2020.
On January 1, 2020, PSC issued 10-year, $1,200,000 face value, 7% bonds, at par. Each $1,000 bond is convertible into 5 shares of PSC common stock. None of the bonds were converted in 2020.
Compute diluted earnings per share for 2020.