Last year, XYZ Inc. reported net income of $220,000 and had 56,000 sharesof common stock and 1,000 share of convertible preferred stockoutstanding for the entire year. Each preferred share is $100 par value, pays5% dividend, and is convertible to 25 shares of common stock. XYZ Inc. alsohad 200 convertible bonds oustanding for the entire year. Each convertiblebond is $1000 par value, pays 3% interest and is convertible to 100 shares ofcommon stock. The tax rate is 30%. What is the diluted earning per share?

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Answered: East year, XYZ Inc. reported net income…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 10MC

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