Question
In: Accounting
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 per share. Average market price in 2018, $30 (market price and option price adjusted for split). | 81,000 | shares |
1. Compute weighted average shares outstanding for 2018.
2. Compute the basic earnings per share for 2018.
3. Compute the diluted earnings per share for 2018.
Solutions
Expert Solution
| Computation of Weighted Average Shares Outstanding during the Year | |||
| Date | Particulars | Calculation | Final Amount |
| 01-Jan | Outstanding at the opening | 6,80,000 | |
| 01-Mar | Less: Repurchase of Treasury Share | 66000*10/12 | 55,000 |
| Sahres Available for Split | 6,25,000 | ||
| 01-Jun | 2 For 1 Split | 625000*2 | 12,50,000 |
| 01-Nov | Add:Issued | 234000*2/12 | 39,000 |
| 12,89,000 | |||
| 6% Convertible preference stock | 2,00,000 | ||
| Add: Stock Option | |||
| Share issue upon Exercise of Option | 81000 | ||
| Less: Treasury Stock Purchaseable With proceed (81000*25)/30 | 67500 | 13,500 | |
| 14,75,500 | |||
| Basic Earnign Per Share = | Earning Attributable to Comman Stock Holder | ||
| Weighted Avearge Share Outstanding | |||
| Earning Attributable to Comman Stock Holder= | Net Income-Preference Share Dividend | ||
| Earning Attributable to Comman Stock Holder= | 2790000-(1000000*6%) | ||
| Earning Attributable to Comman Stock Holder= | 2730000 | ||
| Basic Earnign Per Share = | 2730000/1289000 | 2.12 | |
| Diluted Earnign Per Share = | Earning Attributable to Comman Stock Holder including Potential Comman Stock Holder | ||
| Weighted Avearge Share Outstanding Including Potential Comman Stock | |||
| Diluted Earnign Per Share | 2790000/1475500 | 1.89 |
ekkarill92 answered 2 years agoRelated Solutions
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 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...
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
ADVERTISEMENT
Latest Questions
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
- X Company is considering the purchase of a new processor that costs $200,000. Shipping and setup...
- There are a large number of tasks involved in information technology and programming, and many of...
- Using one quantitative and one qualitative health policy research method described in this chapter, design a...
- What is the Rawls' solution to the age-old question of social (economic / distributive) justice?...
- St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has no salvage...
ADVERTISEMENT