Earnings per Share
At December 31, 2008, the books of Yorke Corporation include the following balances:
|
Long term liabilities: |
|
|
Bonds payable, 8%, each $1,000 bond is convertible into 50 shares |
|
|
of common stock; bonds sold at par and were issued |
|
|
November 3, 2007 |
$ 500,000 |
|
Stockholders’ equity: |
|
|
Preferred stock, 7%, $50 par, cumulative, nonconvertible, |
|
|
10,000 shares outstanding |
500,000 |
|
Paid in capital in excess of par, preferred stock |
300,000 |
|
Common stock, $10 par, authorized 300,000 shares; |
|
|
199,500 shares outstanding |
1,995,000 |
|
Paid in capital in excess of par, common stock |
450,000 |
|
Retained earnings |
519,000 |
The records of Yorke reveal the following additional information.
(a) Had 150,000 shares of common stock outstanding January 1, 2008.
(b) Sold 40,000 shares of common stock for cash on April 30, 2008.
(c) Issued 5% stock dividend on July 1, 2008.
(d) Had income before extraordinary items (after tax) of $715,000.
(e) Had extraordinary loss (net of tax), $16,000.
(f) Had income tax rate, 30%.
(g) Bond indenture does not provide for increase in shares at conversion due to stock dividends declared subsequent to the bond issue date.
1. Is this a simple or complex capital structure?
2. Compute all EPS amounts as required by FASB Statement No.128. How should EPS data be presented under this statement?