Su06Ch16_Solutions

Su06Ch16_Solutions - 16-1 CHAPTER 16 Dilutive Securities...

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Unformatted text preview: 16-1 CHAPTER 16 Dilutive Securities and Earnings Per Share ASSIGNMENT CLASSIFICATION TABLE Topics Questions Brief Exercises Exercises Problems Cases 1. Convertible debt and preferred stock. 1, 2, 3, 4, 5, 6, 7 1, 2, 3 1, 2, 3, 4, 5, 6, 7, 8, 24, 25 2 1 2. Warrants and debt. 2, 3, 8, 9 4, 5 2, 7, 8, 9, 28 1 1, 3 3. Stock options. 1, 10, 11, 12, 13, 14 6, 7 10, 11, 12, 13, 14 1, 3, 4 2, 4, 5 4. Earnings Per Share (EPS) terminology. 17, 22, 23, 25 14 7 5. EPSDetermining potentially dilutive securities. 17, 18, 19, 20 11, 12, 13 22, 23, 27 4 6, 8 6. EPSTreasury stock method. 21 26 5 6, 8 7. EPSWeighted average computation. 15, 16 9, 10 15, 16, 17, 18, 21 4, 5, 6, 7, 8, 9 8. EPSGeneral objectives. 24 8, 14 6, 7, 8 9. EPSComprehensive calculations. 19, 20, 21, 22, 23, 24, 25, 26, 28 6, 7, 8 10. EPSContingent shares. 27 *11. Stock appreciation rights. 15 13, 14 4 *This material is dealt with in an Appendix to the chapter. 16-2 16-3 SOLUTIONS TO EXERCISES EXERCISE 16-1 (15-20 minutes) 1. Cash ($20,000,000 X .99) ............................... 19,800,000 Discount on Bonds Payable ......................... 200,000 Bonds Payable........................................ 20,000,000 Unamortized Bond Issue Costs.................... 70,000 Cash......................................................... 70,000 2. Cash................................................................ 19,600,000 Discount on Bonds Payable ......................... 1,200,000 Bonds Payable........................................ 20,000,000 Paid-in CapitalStock Warrants........... 800,000 Value of bonds plus warrants ($20,000,000 X .98)$19,600,000 Value of warrants (200,000 X $4)800,000Value of bonds $18,800,0003. Debt Conversion Expense ............................ 75,000 Bonds Payable............................................... 10,000,000 Discount on Bonds Payable .................. 55,000 Common Stock ....................................... 1,000,000 Paid-in Capital in Excess of Par ............ 8,945,000* Cash......................................................... 75,000 *[($10,000,000 $55,000) $1,000,000] 16-4 EXERCISE 16-3 (10-20 minutes) Conversion recorded at book value of the bonds: Bonds Payable ............................................................. 500,000 Premium on Bonds Payable ....................................... 7,500 Preferred Stock (500 X 20 X $50) ........................ 500,000 Paid-in Capital in Excess of Par (Preferred Stock).............................................. 7,500 EXERCISE 16-8 (10-15 minutes) SANDS COMPANY Journal Entry September 1, 2004 Cash ........................................................................... 4,220,000 Unamortized Bond Issue Costs............................... 30,000 Bonds Payable (4,000 X $1,000)....................... 4,000,000 Premium on Bonds PayableSchedule 1 ...... 136,000 Paid-in CapitalStock Warrants Schedule 1 ..................................................... Schedule 1 ....
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This homework help was uploaded on 04/06/2008 for the course ACC 302 taught by Professor Ahaha during the Spring '07 term at Central Mich..

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Su06Ch16_Solutions - 16-1 CHAPTER 16 Dilutive Securities...

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