EPS+EXAMPLE+2+SOLUTION+Case+2

# EPS+EXAMPLE+2+SOLUTION+Case+2 - EPS EXAMPLE 2 SOLUT ION...

This preview shows pages 1–4. Sign up to view the full content.

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

View Full Document

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: EPS EXAMPLE 2 SOLUT ION Case 2 Assumption (a) using 8% Weighted Average Number of Common Shares: Date Share Changes Shares Outstanding 1/1 Beginning Balance 100,000 6/30 Stock Split 200,000 Kieso’s Method Dates O/S Shares O/S Restatement F raction Of Year Weighted Shares 1/1-6/30 100,000 2 6/12 100,000 6/30-12/31 200,000 1 6/12 100,000 Total 200,000 F reeman’Method Date Shares Activity Restatement F raction Of Year Weighted Shares 1/1 100,000 2 12/12 200,000 Total 200,000 Basic Earnings per Share Adjustme nt Adjuste d EPS Operating Income 278,00 278,000 1.39 Loss from Discontinued Oper. 40,000 40,000 .20 Net Income 318,00 318,000 1.59 (1) EPS EXAMPLE 2 SOLUT ION Incremental EPS Present Value @ 8% \$120,000 x 3.99271 = \$479,125 \$1,200,000 x .68058 = 816,696 \$1,295,821 Interest net of taxes: \$1,295,821 x .08 x.6 = \$62,200 Incremental EPS: 8% Conv. Bonds: Income Adj. - \$62,199 = \$62,199 = \$1.30 /sh Share Adj. - 20shs./b x 2 x 1,200b = 48,000shs....
View Full Document

## This note was uploaded on 08/02/2011 for the course ACCT 352 taught by Professor Freeman during the Summer '11 term at Windsor.

### Page1 / 7

EPS+EXAMPLE+2+SOLUTION+Case+2 - EPS EXAMPLE 2 SOLUT ION...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online