Question
In: Accounting
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 of $25 per share. The average
market price in 2020, $30 (market price and option price
adjusted for split). 60,000 shares
Instructions
(a) Compute the basic earnings per share for 2020 (Round to the nearest penny).
(b) Compute the diluted earnings per share for 2020 (Round to the nearest penny).
Solutions
Expert Solution
Basic EPS=Net income-Preference Dividend/Weighted Avg numbers of Shares Outsatnding
Diluted EPS=Net Income-Preference Share+Diluted shares
Eanrings/Avg. numbers of shares+DIluted shares
ekkarill92 answered 2 years agoRelated Solutions
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Assume that the following data relative to Kane Company for 2018
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Change
Cumulative
Jan. 1, 2018, Beginning number
680,000
Mar. 1, 2018, Purchase of treasury shares
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Nov. 1, 2018, Issuance of shares
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June 1, 2018, Stock split 2-1
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Transactions in Common Shares
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Stock Options
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