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During 2010, Sanchez, Inc $220,000 \quad \$ 220,000 Of 10%,$100 10 \%, \$ 100

Question 40

Essay

During 2010, Sanchez, Inc.had the following convertible securities outstanding:
A. $220,000 \quad \$ 220,000 of 10%,$100 10 \%, \$ 100 par, convertible preferred stock. Each share is convertible into 5 shares of common stock.
B. $200,000 \$ 200,000 of 9.5% 9.5 \% conventible bonds. Each $1,000 \$ 1,000 bond is convertible into 45 shares of conmon stock
C. $100,000 \$ 100,000 of 8% 8 \% convertible boncks. Each $1,000 \$ 1,000 bond is convertible into 32 shares of common stock.
D. $150,000 \$ 150,000 of 11%,$100 11 \%, \$ 100 par, convertible preferred stock. Each share is convertible into 5 shares of common stock.
Sanchez, Inc.has an income tax rate of 40%.
Required:
During 2010, Sanchez, Inc.had the following convertible securities outstanding: A. \quad \$ 220,000 of 10 \%, \$ 100 par, convertible preferred stock. Each share is convertible into 5 shares of common stock. B. \$ 200,000 of 9.5 \% conventible bonds. Each \$ 1,000 bond is convertible into 45 shares of conmon stock C. \$ 100,000 of 8 \% convertible boncks. Each \$ 1,000 bond is convertible into 32 shares of common stock. D. \$ 150,000 of 11 \%, \$ 100 par, convertible preferred stock. Each share is convertible into 5 shares of common stock. Sanchez, Inc.has an income tax rate of 40%. Required:

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