a)Following is information taken from Tamarisk Inc.'s December 31, 2023 SFP:5% bonds payable, $6,069,000 maturing December 31, 2025,each $1,000 bond convertible into 22 common shares8% bonds payable, $5,192,000, maturing December 31, 2026,each $1,000 bond convertible into 30 common shares at any time up to December 31, 2026Cumulative preferred shares, $5, no-par value, convertible at1 preferred share for 4 common shares, 53,900 shares outstandingCommon shares, no par-value, 3,081,000 shares outstandingShow Transcribed Text3Potentiallydilutivesecurity$5PreferredsharesGTamarisk's net income for 2023 was $8,579,400, and the company was subject to an income tax rate of 20%.Both classes of bonds were outstanding the entire year, as were the preferred shares. The weighted-averagenumber of common shares outstanding during the period was 3,613,000.$IncrementalNumerator EffectShow Transcribed Text3Determine an incremental per share effect for the preferred shares. (Round earnings per share to 3 decimalplaces, e.g. 15.257.)IncrementalDenominator Effectb) Calculate Tamarisk's diluted EPS for 2023. (round to 3 d.p)Please show clear working thanks!$6,069,000$$5,192,000EPS$1,078,000

According to the question given, we need to compute the diluted EPS, and, incremental EPS due to…

a) Following is information taken from Tamarisk Inc's December 31, 2023 SFP: 5% bonds payable, $6,069,000 maturing December 31, 2025, each $1,000 bond convertible into 22 common shares 8% bonds payable, $5,192,000, maturing December 31, 2026, each $1,000 bond convertible into 30 common shares at any time up to December 31, 2026 Cumulative preferred shares, $5, no-par value, convertible at 1 preferred share for 4 common shares, 53,900 shares outstanding Common shares, no par-value, 3,081,000 shares outstanding Show Transcribed Text S Potentially dilutive security Tamarisk's net income for 2023 was $8,579,400, and the company was subject to an income tax rate of 20%. Both classes of bonds were outstanding the entire year, as were the preferred shares. The weighted-average number of common shares outstanding during the period was 3,613,000. $5 Preferred shares $ Incremental Numerator Effect Determine an incremental per share effect for the preferred shares. (Round earnings per share to 3 decimal places, e.g. 15.257.) Show Transcribed Text 3 Incremental Denominator Effect b) Calculate Tamarisk's diluted EPS for 2023. (round to 3 d.p) Please show clear working thanks! $6,069,000 $ $5,192,000 EPS $1,078,000

a) Following is information taken from Tamarisk Inc's December 31, 2023 SFP: 5% bonds payable, $6,069,000 maturing December 31, 2025, each $1,000 bond convertible into 22 common shares 8% bonds payable, $5,192,000, maturing December 31, 2026, each $1,000 bond convertible into 30 common shares at any time up to December 31, 2026 Cumulative preferred shares, $5, no-par value, convertible at 1 preferred share for 4 common shares, 53,900 shares outstanding Common shares, no par-value, 3,081,000 shares outstanding Show Transcribed Text S Potentially dilutive security Tamarisk's net income for 2023 was $8,579,400, and the company was subject to an income tax rate of 20%. Both classes of bonds were outstanding the entire year, as were the preferred shares. The weighted-average number of common shares outstanding during the period was 3,613,000. $5 Preferred shares $ Incremental Numerator Effect Determine an incremental per share effect for the preferred shares. (Round earnings per share to 3 decimal places, e.g. 15.257.) Show Transcribed Text 3 Incremental Denominator Effect b) Calculate Tamarisk's diluted EPS for 2023. (round to 3 d.p) Please show clear working thanks! $6,069,000 $ $5,192,000 EPS $1,078,000

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

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 14P

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On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.
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Following is information taken from Blossom Inc.’s December 31, 2020 balance sheet: 8% bonds payable, $5,200,000 maturing December 31, 2023,each $1,000 bond convertible into 17 common shares $5,200,000 5% bonds payable, $3,200,000, maturing December 31, 2025,each $1,000 bond convertible into 51 common shares at any time up to December 31, 2023 $3,200,000 Cumulative preferred shares, $4, no-par value, convertible at1 preferred share for 4 common shares, 104,000 shares outstanding $2,704,000 Common shares, no par-value, 2,500,000 shares outstanding Blossom’s net income after tax for 2020 was $5,516,000, and the company was subject to an income tax rate of 42%. Both classes of bonds were outstanding the entire year, as were the preferred shares. The weighted-average number of common shares outstanding during the period was 2,400,000. (For simplicity, ignore the requirement to record the debt and equity portions of the convertible bond separately).…
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