Question
In: Accounting
XYZ Company had 200,000 shares of common stock outstanding on December 31, 2020. On July 1,...
XYZ Company had 200,000 shares of common stock outstanding on December 31, 2020. On July 1, 2021, XYZ issued an additional 40,000 shares for cash. On January 1, 2021, XYZ issued 10,000 shares of convertible preferred stock. The preferred stock had a par value of $100 per share and paid a 5% dividend. Each share of preferred stock is convertible into 8 shares of common. During 2021, XYZ paid the regular annual dividend on the preferred and common stock. Net income for the year was $200,000.
Required: Calculate XYZ's basic and diluted earnings per
share for 2021. (Round your answers to 2 decimal
places.)
| Earning per share | |
| Basic | |
| Diluted |
Solutions
Expert Solution
Basic Earnings per share -
Basic earnings per share means net income earned by the company after deducting dividend distributed to preference shareholders available to shareholders.
Diluted Earnings per share -
Diluted earnings per share means net income earned by the company after deducting dividend distributed to preference shareholders available to shareholders in addition to this the portion of dilution will also get added in the number of shares to get effects of dilutions.
Solutions -
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