EXERCISE 16-20 - (c) Revenues $17,500 Expenses: Other than...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
EXERCISE 16-20 (a) Revenues $17,500 Expenses: Other than interest $8,400 Bond interest (60 X $1,000 X .08) 4,800 13,200 Income before income taxes 4,300 Income taxes (40%) 1,720 Net income $ 2,580 Diluted earnings per share: $2,580 + (1–.40)($4,800) = $5,460 = $.68 2,000 + 6,000 8,000 (b) Revenues $17,500 Expenses: Other than interest $8,400 Bond interest (60 X $1,000 X .08 X 4/12) 1,600 10,000 Income before income taxes 7,500 Income taxes (40%) 3,000 Net income $ 4,500 Diluted earnings per share: $4,500 + (1–.40)($1,600) = $5,460 = $1.37 2,000 + (6,000 X 1/3 yr.) 4,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: (c) Revenues $17,500 Expenses: Other than interest $8,400 Bond interest (60 X $1,000 X .08 X 1/2) 2,400 Bond interest (40 X $1,000 X .08 X 1/2) 1,600 12,400 Income before income taxes 5,100 Income taxes (40%) 2,040 Net income $ 3,060 Diluted earnings per share (see note): $3,060 + (1.40)($4,000) = $5,460 = $.68 2,000 + (2,000 X 1/2 yr.) + 4,000 + (2,000 X 1/2) 8,000 Note: The answer is the same as (a). In both (a) and (c), the bonds are assumed converted for the entire year....
View Full Document

This note was uploaded on 10/22/2008 for the course ACC 449 taught by Professor Long during the Summer '08 term at University of Phoenix.

Page1 / 2

EXERCISE 16-20 - (c) Revenues $17,500 Expenses: Other than...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online