Question

Question 1: During the year P had 14195 shares of common stock outstanding. P had fully...

Question 1:

  • During the year P had 14195 shares of common stock outstanding.
  • P had fully vested incentive stock options exercisable at $4 per share to obtain 1203 shares of common stock when the average market price and ending market price of the stock of common stock was $50.
  • The net income for the year was $126693.
  • The income tax rate was 37%.

For the year diluted EPS was:

Question 2:

At December 31, 2016 and 2015, P Corp. had

  • 16678 shares of common stock
  • 1533 shares of 12%, $90 par value convertible preferred stock convertible share for share into common stock
  • Net income for 2016 was $120132
  • The income tax rate was 36%

For 2016, diluted EPS was:

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution to Question 1:

Calculation of Dilutive Shares:
Common Stock Outstanding = 14,195
Stock Options Outstanding (n0) = 1,203
Exercise Price (X) = $4 per share
Average Market Price of Share (P) = $50 per share

Diluted EPS = $8.28 per share

Solution to Question 2:

Common Stock Outstanding = 16,678
Convertible Preferred Stock = 1,533
No. of Dilutive Shares = 1,533

Earnings Available for Equity Holders = Net Income - Preferred Dividend

Preferred Dividend = 1,533 * $90 * 12% = $16,556.40

Earnings Available for Equity Holders = $120,132 - $16,556.40 = $103,576.60

Diluted EPS = $5.69 per share

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Red cab Company had 50,000 shares of common stock outstanding on January 1, 2021. On April...
Red cab Company had 50,000 shares of common stock outstanding on January 1, 2021. On April 1, 2021, The company issued 20,000 shares of common stock. The company had outstanding fully vested stock options for 5,000 shares exercisable at $10 that had not been exercised by its executives. The end-of-year market price of common stock was $13 while the average price for the year was $12. They reported net income in the amount of $269,915 for 2021. what is the...
On January 1, 2018, Tonge Industries had outstanding 680,000 common shares ($1 par) that originally sold...
On January 1, 2018, Tonge Industries had outstanding 680,000 common shares ($1 par) that originally sold for $20 per share, and 4,000 shares of 10% cumulative preferred stock ($100 par), convertible into 40,000 common shares. On October 1, 2018, Tonge sold and issued an additional 20,000 shares of common stock at $35. At December 31, 2018, there were 21,000 incentive stock options outstanding, issued in 2017, and exercisable after one year for 21,000 shares of common stock at an exercise...
On December 31, 2015, Berclair Inc. had 400 million shares of common stock and 5 million...
On December 31, 2015, Berclair Inc. had 400 million shares of common stock and 5 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2016, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2016. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2016, was $550 million. The income tax rate...
During the current year, High Corporation had 4.9 million shares of common stock outstanding. $7,875,000 of...
During the current year, High Corporation had 4.9 million shares of common stock outstanding. $7,875,000 of 20% convertible bonds were issued at face amount at the beginning of the year. High reported income before tax of $5.9 million and net income of $4.9 million for the year. The bonds are convertible into 815,000 shares of common. What is diluted EPS (rounded)?
On December 31, 2020, Jackson Company had 100,000 shares of common stock outstanding and 28,000 shares...
On December 31, 2020, Jackson Company had 100,000 shares of common stock outstanding and 28,000 shares of 6%, $50 par, cumulative preferred stock outstanding. On February 28, 2021, Jackson purchased 22,000 shares of common stock on the open market as treasury stock for $33 per share. Jackson sold 5,800 treasury shares on September 30, 2021, for $35 per share. Net income for 2021 was $178,905. Also outstanding during the year were fully vested incentive stock options giving key executives the...
On December 31, 2020, Jackson Company had 100,000 shares of common stock outstanding and 36,000 shares...
On December 31, 2020, Jackson Company had 100,000 shares of common stock outstanding and 36,000 shares of 5%, $50 par, cumulative preferred stock outstanding. On February 28, 2021, Jackson purchased 30,000 shares of common stock on the open market as treasury stock for $41 per share. Jackson sold 6,600 treasury shares on September 30, 2021, for $43 per share. Net income for 2021 was $186,905. Also outstanding during the year were fully vested incentive stock options giving key executives the...
Ahnberg Corporation had 560,000 shares of common stock issued and outstanding at January 1. No common...
Ahnberg Corporation had 560,000 shares of common stock issued and outstanding at January 1. No common shares were issued during the year, but on January 1, Ahnberg issued 180,000 shares of convertible preferred stock. The preferred shares are convertible into 360,000 shares of common stock. During the year Ahnberg paid $108,000 cash dividends on the preferred stock. Net income was $1,060,000. What were Ahnberg's basic and diluted earnings per share for the year? (Round your answers to 2 decimal places.)...
On December 31, 2020, Ignatius Corporation had 7 million shares of common stock and 600,000 shares...
On December 31, 2020, Ignatius Corporation had 7 million shares of common stock and 600,000 shares of 6% cumulative preferred stock (par $100). February 28, 2021: purchased an 600,000 shares of common stock as treasury stock for $50 per share September 30, 2021: sold 300,000 treasury shares for $60 per share Net income for 2021 was $900,000. The tax rate for the year was 25%. Also outstanding during the year were fully vested incentive stock options giving key officers the...
On December 31, 2017, Jackson Company had 100,000 shares of common stock outstanding and 34,000 shares...
On December 31, 2017, Jackson Company had 100,000 shares of common stock outstanding and 34,000 shares of 5%, $50 par, cumulative preferred stock outstanding. On February 28, 2018, Jackson purchased 28,000 shares of common stock on the open market as treasury stock for $39 per share. Jackson sold 6,400 treasury shares on September 30, 2018, for $41 per share. Net income for 2018 was $184,905. Also outstanding during the year were fully vested incentive stock options giving key personnel the...
During the current year, High Corporation had 5.0 million shares of common stock outstanding. $8,025,000 of...
During the current year, High Corporation had 5.0 million shares of common stock outstanding. $8,025,000 of 17% convertible bonds were issued at face amount at the beginning of the year. High reported income before tax of $6.0 million and net income of $5.0 million for the year. The bonds are convertible into 825,000 shares of common. What is diluted EPS (rounded)? Choices are 1.09 2.73 1.23 1.05
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT