On January 1, 2022, ABC Co. has 100,000 outstanding ordinary shares. On May 1, 2022, ABC issued 3,000 P 1,000 convertible bonds payable with 12% rate. Each bond is convertible into six ordinary shares. By October 1 of the same year, all the bonds are converted. By year-end, ABC reported net income of P 4,000,000. Income tax rate is 30%. How much is the interest expense to be added back to net income for diluted EPS computation?

On January 1, 2022, ABC Co. has 100,000 outstanding ordinary shares. On May 1, 2022, ABC issued 3,000 P 1,000 convertible bonds payable with 12% rate. Each bond is convertible into six ordinary shares. By October 1 of the same year, all the bonds are converted. By year-end, ABC reported net income of P 4,000,000. Income tax rate is 30%. How much is the interest expense to be added back to net income for diluted EPS computation?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 2PB: Charleston Inc. issued $200,000 bonds with a stated rate of 10%. The bonds had a 10-year maturity...

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