On June 1, 2015, Metlock Company and Bonita Company merged to
form Windsor Inc. A total of 752,000 shares were issued to complete
the merger. The new corporation reports on a calendar-year
basis.
On April 1, 2017, the company issued an additional 562,000 shares
of stock for cash. All 1,314,000 shares were outstanding on
December 31, 2017.
Windsor Inc. also issued $600,000 of 20-year, 7% convertible bonds
at par on July 1, 2017. Each $1,000 bond converts to 44 shares of
common at any interest date. None of the bonds have been converted
to date.
Windsor Inc. is preparing its annual report for the fiscal year
ending December 31, 2017. The annual report will show earnings per
share figures based upon a reported after-tax net income of
$1,614,000. (The tax rate is 40%.)
Determine the following for 2017.
(a) The number of shares to be used for
calculating: (Round answers to 0 decimal places, e.g.
$2,500.)
(1) | Basic earnings per share | shares | ||||
(2) | Diluted earnings per share | shares |
(b) The earnings figures to be used for
calculating: (Round answers to 0 decimal places, e.g.
$2,500.)
(1) | Basic earnings per share | $ | ||
(2) | Diluted earnings per share | $ |
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