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EARNING PER SHARES Edwards and Everett, Inc. had the following items in its capital structure at...

EARNING PER SHARES

Edwards and Everett, Inc. had the following items in its capital structure at December 31, 2020

Common stock options, issued in 2019, exercisable for 22,000 shares, beginning in 2022, at a “strike” price of $20 per share. The cash that would be received from the option-holders from a hypothetical exercise of the options at December 31, 2020 would be sufficient for Edwards & Everett to acquire 13,400 shares of its own common stock (as treasury stock).

Treasury stock, common, 20,000 shares, acquired on November 30, 2019 ….......................................................... $ 280,000

Additional paid-in-capital................................................................................................................. ...............................760,000

Common stock, $10 stated value, issued January 2, 2019 (current market value, $17 per share)............................. 1,200,000

Preferred stock, 10%, $8 par value, convertible into 146,000 common shares no earlier than 2020, issued at par value on July 1, 2020 (current market value, $8 per share)................................................. 1,660,000

Stock warrants, issued in 2019 in exchange for legal services at the company’s formation, convertible into 1,300 shares of common stock at the discretion of the warrant-holders, but not earlier than 2022. A hypothetical conversion of the warrants at December 31, 2020, would require a $14,000 cash payment from the warrant-holders, which would be sufficient for Edwards & Everett to acquire 300 shares of its own common stock (as treasury stock)................................................................ 20,000

Edwards & Everett’s net income for 2020 was $783,000; the company’s Board of Directors has not yet declared a dividend for 2020 for the preferred shareholders.

What earnings per share did Edwards and Everett, Inc. report for the year ended December 31, 2020? Prepare a schedule to support your answer.

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