Question

In: Accounting

Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,890,000...

Assume that the following data relative to Kane Company for 2018 is available:

Net Income $2,890,000
Transactions in Common Shares Change Cumulative
Jan. 1, 2018, Beginning number 720,000
Mar. 1, 2018, Purchase of treasury shares (67,200) 652,800
June 1, 2018, Stock split 2-1 652,800 1,305,600
Nov. 1, 2018, Issuance of shares 240,000 1,545,600
6% Cumulative Convertible Preferred Stock
Sold at par, convertible into 190,000 shares of common (adjusted for split). $950,000
Stock Options
Exercisable at the option price of $25 per share. Average market price in 2018, $30 (market price and option price adjusted for split). 93,000 shares

Compute weighted average shares outstanding for 2018.

Weighted average shares outstanding

Compute the basic earnings per share for 2018. (Round answer to 2 decimal places, e.g. 52.75.)

Basic earnings per share $

Compute the diluted earnings per share for 2018. (Round answer to 2 decimal places, e.g. 52.75.)

Diluted earnings per share $

Solutions

Expert Solution

Answer:

Computation of weighted average shares outstanding

Jan-01

outstanding

720000

Mar-01

Repurchase

(67200*5/6)

56000

776000

Jun-01

2 for 1 split

1552000

Nov-01

issued

1/6*240000

40000

1592000

Additional shares for the purpose of diluted earnings per share

potentially dilutive securities

8% convertible preferred stock

190000

Stock options

    Proceeds from exercise of 99000 options

2325000

    Shares issued upon exercise of options

93000

    less: treasury stock purchasable with proceeds

(2325000/30)

77500

15500

    Dilutive securities - Additional shares

205500

Interest : 950000*6%

57000

Basic earnings per share

2890000-57000/1592000 =$1.78

Diluted earnings per share

2890000/(1592000+205500) = $1.61

ekkarill92 answered 1 month ago
Next > < Previous

Related Solutions

Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,790,000...
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,790,000 Transactions in Common Shares Change Cumulative Jan. 1, 2018, Beginning number 680,000 Mar. 1, 2018, Purchase of treasury shares (66,600) 613,400 June 1, 2018, Stock split 2-1 613,400 1,226,800 Nov. 1, 2018, Issuance of shares 234,000 1,460,800 6% Cumulative Convertible Preferred Stock Sold at par, convertible into 200,000 shares of common (adjusted for split). $1,000,000 Stock Options Exercisable at the option price of $25...
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,800,000...
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,800,000 Transactions in Common Shares Change Cumulative Jan. 1, 2018, Beginning number 650,000 Mar. 1, 2018, Purchase of treasury shares (55,200) 594,800 June 1, 2018, Stock split 2-1 594,800 1,189,600 Nov. 1, 2018, Issuance of shares 216,000 1,405,600 6% Cumulative Convertible Preferred Stock Sold at par, convertible into 190,000 shares of common (adjusted for split). $950,000 Stock Options Exercisable at the option price of $25...
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,890,000...
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,890,000 Transactions in Common Shares Change Cumulative Jan. 1, 2018, Beginning number 740,000 Mar. 1, 2018, Purchase of treasury shares (72,000) 668,000 June 1, 2018, Stock split 2-1 668,000 1,336,000 Nov. 1, 2018, Issuance of shares 222,000 1,558,000 6% Cumulative Convertible Preferred Stock Sold at par, convertible into 180,000 shares of common (adjusted for split). $900,000 Stock Options Exercisable at the option price of $25...
Assume that the following data relative to Kane Company for 2018 os available: Net Income 2900000...
Assume that the following data relative to Kane Company for 2018 os available: Net Income 2900000 Transaction in common shares change cumulative Jan. 1 2018 Beginning number. 710000 Mar 1 2018 Purchase of treasury shares (61200) 648800 June 1 2018 stock split 2-1. 648800. 1297600 Nov 1. 2018 Issuance of shares 258000. 1555600 6% cumulative convertible preferred stock sold at par, convertible into 180000 shares of common (adjusted for split) stock options exercisable at the option price of $25 per...
Assume that the following data relative to Kane Company for 2020 is available: Net Income                           &nbs
Assume that the following data relative to Kane Company for 2020 is available: Net Income                                                                                                                                                                                                                $2,100,000 Transactions in Common Shares Change Cumulative Jan. 1, 2020, Beginning number 700,000 Mar. 1, 2020, Purchase of treasury shares (60,000) 640,000 June 1, 2020, Stock split 2-1 640,000 1,280,000 Nov. 1, 2020, Issuance of shares 120,000 1,400,000 8% Cumulative Convertible Preferred Stock Sold at par, convertible into 200,000 shares of common (adjusted for split).    $1,000,000 Stock Options Exercisable at the option price...
Assume that the following data relative to Kane Company for 2015 is available: Net Income $2,800,000...
Assume that the following data relative to Kane Company for 2015 is available: Net Income $2,800,000 Jan. 1, 2015, Beginning number of Common Shares 700,000 Transactions in Common Shares in 2015 On April 1, the corporation purchased on the market 60,000 of its own outstanding shares. On July 1, the corporation declared and issued a 2-for-1 stock split. On October 1, the corporation issued 240,000 new shares to raise additional capital. The following dilutive securities were issued prior to 2015....
Assume that the following data relative to Eddy Company for 2021 is available: Net Income for...
Assume that the following data relative to Eddy Company for 2021 is available: Net Income for the year : $2,100,000; On Jan.1,there are 700 ,000 shares of common shares outstanding transactions in common shares: May purchase of 60,000 treasury shares June stock split 2-1 Nov issuance of 120,000 shares 8% Cumulative Convertible Preferred Stock: $1,000,000, convertible into 200,000 shares of common stock. (adjusted for split) Stock Options: exercisable to 60,000 shares of common stock at the price of $25 per...
Assume that the following data relative to Dakota Company for 2015 is available: Net Income $2,500,000...
Assume that the following data relative to Dakota Company for 2015 is available: Net Income $2,500,000 Jan. 1, 2015, Beginning number of Common Shares 600,000 Transactions in Common Shares in 2015 On February 1, the corporation purchased on the market 100,000 of its own outstanding shares. On May 1, the corporation declared and issued a 2-for-1 stock split. On August 1, the corporation issued 200,000 new shares to raise additional capital. On November 1, the corporation issued a 10% stock...
1- Assume that the following data relative to Rice Company for 2020 is available Net Income...
1- Assume that the following data relative to Rice Company for 2020 is available Net Income $3,984,000: Transactions in Common Shares Change Cumulative Jan. 1,2020 Beginning number 650,000 Apr. 1,2020 Purchase of treasury shares (50,000) 600,000 June 1,2020 100% stock dividend 600,000 1,200,000 Dec 1,2020 Issuance of shares 200,000 1,400,000 5% Cumulative Preferred Stock: $1,000,000 sold at par on January  1,2020 convertible into 200,000 shares of common stock Stock options: Exercisable at the option of $30 per share. Average market price...
2 The following information is available for Barone Corporation in 2018 with Net Income of $20,250,000....
2 The following information is available for Barone Corporation in 2018 with Net Income of $20,250,000. The company also had Preferred Stock, 6%, $50 par value with 150,000 shares authorized and 135,000 issued and outstanding. The full dividend was paid this year. January 1, 2018 Shares outstanding 4,000,000 April 1, 2018 Shares issued 640,000 July 1, 2018 Treasury shares purchased 240,000 October 1, 2018 Shares issued in a 30% stock dividend November 1, 2018 2::1 Split Compute the basic EPS....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT