Question

Stanley Department Stores reported net income of $900,000 for the year ended December 31, 2018. Additional...

Stanley Department Stores reported net income of $900,000 for the year ended December 31, 2018.

Additional Information:

Common shares outstanding at Jan. 1, 2018 130,000
Incentive stock options (vested in 2017) outstanding throughout 2018 36,000
(Each option is exercisable for one common share at an exercise price of $27.00)
During the year, the market price of Stanley’s common stock averaged $32.4 per share.
On Aug. 30 Stanley sold 15,000 common shares.
Stanley’s only debt consisted of $44,000 of 10% short term bank notes.
The company’s income tax rate is 40%.


Required:

Compute Stanley’s basic and diluted earnings per share for the year ended December 31, 2018. (Enter your answers in thousands.)

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer-Stanley’s basic and diluted earnings per share for the year ended December 31, 2018:-

Basic EPS

Weighted Average of Stock Option:-

Shares outstanding on Jan.1,2018 130,000*12/12= 130,000
Add: Shares sold on Aug.30, 2018 15,000*4/12= 5,000
Weighted Average Shares 135,000

Basic Earnings Per Share= $900,000/ 135,000 shares

=$6.67 Per Share

Diluted EPS

Shares Outstanding 135,000
Add: Vested Stock Options 36,000
Less: TS Buy Back (36,000*$27/ $32.4) 30,000
141,000

Diluted Earnings Per Share= $900,000/ 141,000 shares

=$6.38 Per Share

Kindly give me thumbs up if u like my answer....Thanks!!

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
Stanley Department Stores reported net income of $900,000 for the year ended December 31, 2021. Additional...
Stanley Department Stores reported net income of $900,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding at Jan. 1, 2021 130,000 Incentive stock options (vested in 2020) outstanding throughout 2021 36,000 (Each option is exercisable for one common share at an exercise price of $27.00) During the year, the market price of Stanley’s common stock averaged $32.40 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley’s only debt consisted of $44,000 of 10% short-term...
Stanley Department Stores reported net income of $900,000 for the year ended December 31, 2021. Additional...
Stanley Department Stores reported net income of $900,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding at Jan. 1, 2021 130,000 Incentive stock options (vested in 2020) outstanding throughout 2021 36,000 (Each option is exercisable for one common share at an exercise price of $27.00) During the year, the market price of Stanley’s common stock averaged $32.40 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley’s only debt consisted of $44,000 of 10% short-term...
Stanley Department Stores reported net income of $900,000 for the year ended December 31, 2021. Additional...
Stanley Department Stores reported net income of $900,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding at Jan. 1, 2021 130,000 Incentive stock options (vested in 2020) outstanding throughout 2021 36,000 (Each option is exercisable for one common share at an exercise price of $27.00) During the year, the market price of Stanley’s common stock averaged $32.40 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley’s only debt consisted of $44,000 of 10% short-term...
Stanley Department Stores reported net income of $720,000 for the year ended December 31, 2021. Additional...
Stanley Department Stores reported net income of $720,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding at Jan. 1, 2021 80,000 Incentive stock options (vested in 2020) outstanding throughout 2021 24,000 (Each option is exercisable for one common share at an exercise price of $37.50.) During the year, the market price of Stanley’s common stock averaged $45 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley’s only debt consisted of $50,000 of 10% short-term...
Stanley Department Stores reported net income of $920,000 for the year ended December 31, 2021. Additional...
Stanley Department Stores reported net income of $920,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding at Jan. 1, 2021 135,000 Incentive stock options (vested in 2020) outstanding throughout 2021 36,000 (Each option is exercisable for one common share at an exercise price of $27.50) During the year, the market price of Stanley’s common stock averaged $33.00 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley’s only debt consisted of $45,000 of 10% short-term...
For the year ended December 31, 2018, Norstar Industries reported net income of $655,000. At January...
For the year ended December 31, 2018, Norstar Industries reported net income of $655,000. At January 1, 2018, the company had 900,000 common shares outstanding. The following changes in the number of shares occurred during 2018:    Apr. 30 Sold 60,000 shares in a public offering. May 24 Declared and distributed a 5% stock dividend. June 1 Issued 72,000 shares as part of the consideration for the purchase of assets from a subsidiary. Required: Compute Norstar's earnings per share for...
On December 31, 2017, Berclair Inc. had 560 million shares of common stock and 5 million...
On December 31, 2017, Berclair Inc. had 560 million shares of common stock and 5 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 168 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $1,050 million. Also outstanding at December...
On December 31, 2017, Berclair Inc. had 600 million shares of common stock and 17 million...
On December 31, 2017, Berclair Inc. had 600 million shares of common stock and 17 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 120 million shares of its common stock as treasury stock. Berclair issued a 6% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $850 million. Also outstanding at December...
On December 31, 2017, Berclair Inc. had 360 million shares of common stock and 3 million...
On December 31, 2017, Berclair Inc. had 360 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 88 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $550 million. Also outstanding at December...
On December 31, 2017, Berclair Inc. had 420 million shares of common stock and 6 million...
On December 31, 2017, Berclair Inc. had 420 million shares of common stock and 6 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 112 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $700 million. Also outstanding at December...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT