Question

Amy Dyken, controller at Ayayai Pharmaceutical Industries, a public company, is currently preparing the calculation for...

Amy Dyken, controller at Ayayai Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Ayayai’s financial statements. Below is selected financial information for the fiscal year ended June 30, 2020.

Ayayai Pharmaceutical Industries
Selected Balance Sheet Information
June 30, 2020

Long-term debt
   Notes payable, 10%

$1,000,000

   9% convertible bonds payable

5,050,000

   10% bonds payable

5,920,000

     Total long-term debt

$11,970,000

Shareholders’ equity
   Preferred stock, 5% cumulative, $50 par value, 109,000 shares authorized, 27,250 shares issued and outstanding

$1,362,500

   Common stock, $1 par, 9,800,000 shares authorized, 980,000 shares issued and outstanding

980,000

   Additional paid-in capital

3,930,000

   Retained earnings

6,050,000

     Total shareholders’ equity

$12,322,500


The following transactions have also occurred at Ayayai.

1. Options were granted on July 1, 2019, to purchase 220,000 shares at $14 per share. Although no options were exercised during fiscal year 2020, the average price per common share during fiscal year 2020 was $20 per share.
2. Each bond was issued at face value. The 9% convertible bonds will convert into common stock at 50 shares per $1,000 bond. The bonds are exercisable after 5 years and were issued in fiscal year 2019.
3. The preferred stock was issued in 2019.
4. There are no preferred dividends in arrears; however, preferred dividends were not declared in fiscal year 2020.
5. The 980,000 shares of common stock were outstanding for the entire 2020 fiscal year.
6. Net income for fiscal year 2020 was $1,480,000, and the average income tax rate is 20%.


For the fiscal year ended June 30, 2020, calculate the following for Ayayai Pharmaceutical Industries. (Round answers to 2 decimal places, e.g. $2.45.)

(a) Basic earnings per share.

Basic earnings per share

$


(b) Diluted earnings per share.

Diluted earnings per share

$

Homework Answers

Answer #1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet. For detailed answer refer to the supporting sheet.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Amy Dyken, controller at Sweet Pharmaceutical Industries, a public company, is currently preparing the calculation for...
Amy Dyken, controller at Sweet Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Sweet’s financial statements. Below is selected financial information for the fiscal year ended June 30, 2020. Sweet Pharmaceutical Industries Selected Balance Sheet Information June 30, 2020 Long-term debt    Notes payable, 11% $1,010,000    8% convertible bonds payable 5,050,000    11% bonds payable 5,950,000      Total long-term debt $12,010,000 Shareholders’ equity    Preferred stock, 6% cumulative, $50 par...
Amy Dyken, controller at Shamrock Pharmaceutical Industries, a public company, is currently preparing the calculation for...
Amy Dyken, controller at Shamrock Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Shamrock’s financial statements. Below is selected financial information for the fiscal year ended June 30, 2020. Shamrock Pharmaceutical Industries Selected Balance Sheet Information June 30, 2020 Long-term debt    Notes payable, 10% $1,020,000    9% convertible bonds payable 5,030,000    10% bonds payable 5,950,000      Total long-term debt $12,000,000 Shareholders’ equity    Preferred stock, 5% cumulative, $50 par...
Amy Dyken, controller at Crane Pharmaceutical Industries, a public company, is currently preparing the calculation for...
Amy Dyken, controller at Crane Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Crane’s financial statements. Below is selected financial information for the fiscal year ended June 30, 2020. Long-term debt    Notes payable, 10% $1,020,000    9% convertible bonds payable 4,970,000    10% bonds payable 5,980,000      Total long-term debt $11,970,000 Shareholders’ equity    Preferred stock, 5% cumulative, $50 par value, 95,000 shares authorized, 23,750 shares issued and outstanding $1,187,500...
Amy Dyken, controller at Fitzgerald Pharmaceutical Industries, a public company, is currently preparing the calculation for...
Amy Dyken, controller at Fitzgerald Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Fitzgerald’s financial statements. Below is selected financial information for the fiscal year ended June 30, 2020. Fitzgerald Pharmaceutical Industries Selected Balance Sheet Information June 30, 2020 Long-term debt    Notes payable, 10% $1,000,000    8% convertible bonds payable 5,000,000    10% bonds payable 6,000,000      Total long-term debt $12,000,000 Shareholders’ equity    Preferred stock, 6% cumulative, $50 par...
Amy Dyken, controller at Sandhill Pharmaceutical Industries, a public company, is currently preparing the calculation for...
Amy Dyken, controller at Sandhill Pharmaceutical Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Sandhill’s financial statements. Below is selected financial information for the fiscal year ended June 30, 2020. Sandhill Pharmaceutical Industries Selected Balance Sheet Information June 30, 2020 Long-term debt    Notes payable, 11% $990,000    7% convertible bonds payable 5,080,000    11% bonds payable 6,120,000      Total long-term debt $12,190,000 Shareholders’ equity    Preferred stock, 6% cumulative, $50 par...
On June 1, 2018, Cheyenne Company and Ayayai Company merged to form Pina Inc. A total...
On June 1, 2018, Cheyenne Company and Ayayai Company merged to form Pina Inc. A total of 802,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 625,000 shares of stock for cash. All 1,427,000 shares were outstanding on December 31, 2020. Pina Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 38 shares...
On June 1, 2018, Cheyenne Company and Ayayai Company merged to form Pina Inc. A total...
On June 1, 2018, Cheyenne Company and Ayayai Company merged to form Pina Inc. A total of 809,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 624,000 shares of stock for cash. All 1,433,000 shares were outstanding on December 31, 2020. Pina Inc. also issued $600,000 of 20-year, 9% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 40 shares...
On June 1, 2018, Cheyenne Company and Ayayai Company merged to form Pina Inc. A total...
On June 1, 2018, Cheyenne Company and Ayayai Company merged to form Pina Inc. A total of 800,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 563,000 shares of stock for cash. All 1,363,000 shares were outstanding on December 31, 2020. Pina Inc. also issued $600,000 of 20-year, 7% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 42 shares...
6. Earnings per Share with Convertible Bonds On January 1, 2019, Houston Company issued, at par,...
6. Earnings per Share with Convertible Bonds On January 1, 2019, Houston Company issued, at par, 600 $1,000 6% bonds. Each bond is convertible into 10 shares of common stock. Houston’s net income for 2019 was $600,000. The tax rate was 20%. Throughout 2019, 100,000 shares of $10 par common stock were outstanding. In addition, 1,000 shares of 5% $100 par cumulative preferred stock were outstanding. No preferred stock dividends were declared during 2019. None of the bonds were converted...
On January 1, 2020, Windsor Company issued 10-year, $2,010,000 face value, 6% bonds, at par. Each...
On January 1, 2020, Windsor Company issued 10-year, $2,010,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Windsor common stock. Windsor’s net income in 2020 was $518,400, and its tax rate was 20%. The company had 108,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. (a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT