Ch16 solutions 19-23-26-27

Ch16 solutions - SOLUTIONS TO EXERCISES EXERCISE 16-19(1015 minutes Event Beginning balance Issued shares Reacquired shares Dates Outstanding Jan

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SOLUTIONS TO EXERCISES EXERCISE 16-19 (10–15 minutes) Event Dates Outstanding Shares Outstanding Fraction of Year Weighted Shares Beginning balance Jan. 1–April 1 900,000 3/12 225,000 Issued shares April 1–Oct. 1 1,350,000 6/12 675,000 Reacquired shares Oct. 1–Dec. 31 1,240,000 3/12 310,000 Weighted average number of shares outstanding— unadjusted 1,210,000 Stock dividend, 2/15/09 1.05 Weighted average number of shares outstanding— adjusted 1,270,500 Net income $2,530,000 Preferred dividend (280,000 X $50 X 7%) (980,000 ) $1,550,000 Earnings per share for 2008: Net income applicable to common stock = $1,550,000 = $1.22 Weighted average number of common shares outstanding 1,270,500
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EXERCISE 16-23 (10–15 minutes) (a) Net income $300,000 Add: Interest savings (net of tax) [$120,000 X (1 – .40)] 72,000 Adjusted net income $372,000 $2,000,000 ÷ $1,000 = 2,000 bonds X 15 30,000 shares Diluted EPS: $372,000 ÷ (100,000 + 30,000) = $2.86 EXERCISE 16-23 (Continued) (b) Shares outstanding
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This note was uploaded on 09/20/2011 for the course ACC 319 taught by Professor Jones during the Fall '10 term at UNC Greensboro.

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Ch16 solutions - SOLUTIONS TO EXERCISES EXERCISE 16-19(1015 minutes Event Beginning balance Issued shares Reacquired shares Dates Outstanding Jan

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