Arthur, Inc., had 610,000 shares of common stock issued and outstanding on December 31, 2015. On...

Arthur, Inc., had 610,000 shares of common stock issued and outstanding on December 31, 2015. On July 1, 2016, an additional 40,000 shares of common stock were issued for cash. Arthur, Inc. also had unexercised stock options to purchase 32,000 shares of common stock at $15 per share outstanding at the beginning and end of 2016. The average market price of Arthur, Inc. common stock was $20 during 2016. How many shares that should be included in computing diluted earnings per share for 2016?

$630,000

$638,000

$658,000

$662,000

Expert Solution



	Computation of How many shares that should be included in computing diluted earnings per share for 2016: -
	share considered in computation of diluted Earning per share	638000
	Calculations mentioned below
Date	Particulars	No shares held	Period of holding	Calculation	Diluted shares
1/1/2016	Total shares outstanding at the beginning of the year	610000	12 months	610000 /12 months X 12 months	610000
1/7/2016	40000 stock was purchased	40000	6 months	40000 /12 months X 6 months	20000
1/1/2016	32000 unexercised stock option to purchase @$15 each	32000	12 months	32000(32000 X $15/ $20) /12 months X 12 months	8000
	share considered in computation of diluted EPS			Total ( 610000+20000+8000)	638000

	Notes
1	Total 610000 shares out standing beginning and at the end of the period so we have to considered the total shares out standing divided by 12 months and multiplied with 12 months ,while calculating the diluted shares
2	In 1 st of July 2016 Arthur. Inc., purchased additional stock of 40000 but the stock held only six month in the current year so we have taken half of the stock for holding half of the period. 40000 share purchased and divided by 12 months and multiplied with 6 months ,while calculating the diluted shares because of holding period of shares only 6 months
3	and third one is 32000 stock option is available at the beginning and the end of the year the price of the option is $15 and the average price of the stock of Artur inc is $ 20 per share, so 32000 shares less 24000 shares based on (32000 X $15/$20) i.e 8000 shares arrived

ekkarill92 answered 2 years ago

Marigold Corp. had 1540000 shares of common stock issued and outstanding at December 31, 2020. On...

Marigold Corp. had 1540000 shares of common stock issued and outstanding at December 31, 2020. On July 1, 2021 an additional 1255000 shares were issued for cash. Marigold also had stock options outstanding at the beginning and end of 2021 which allow the holders to purchase 370000 shares of common stock at $20 per share. The average market price of Marigold's common stock was $25 during 2021. What is the number of shares that should be used in computing diluted...

On December 1, 2017, Arthur, Inc. had 40,000 shares of $10 par value common stock issued...

On December 1, 2017, Arthur, Inc. had 40,000 shares of $10 par value common stock issued and outstanding. The next day it declared a 50% stock dividend. The market value of the stock on that date was $9 per share. Which of the following is the correct journal entry to record this transaction? A.debit Stock Dividends $200,000 and credit Common Stock Dividend Distributable $200,000 B.debit Common Stock $200,000 and credit Cash $200,000 C.debit Stock Dividends $360,000 and credit Cash $360,000...

At December 31, 2017, Bramble Company had 520,000 shares of common stock issued and outstanding, 320,000...

At December 31, 2017, Bramble Company had 520,000 shares of common stock issued and outstanding, 320,000 of which had been issued and outstanding throughout the year and 200,000 of which were issued on October 1, 2017. Net income for the year ended December 31, 2017, was $1,220,000. Assume that Bramble issued 10-year, $180,000 face value, 6% bonds in 2016 at par (payable annually on January 1). Each $1,000 bond is convertible into 40 shares of Bramble’s $2 par value common...

1. Ajax Enterprises had 220,000 shares of common stock issued and outstanding at December 31, 2025....

1. Ajax Enterprises had 220,000 shares of common stock issued and outstanding at December 31, 2025. Unexercised stock options to purchase 40,000 shares of common stock at $20 per share were outstanding at the beginning and end of 2026. The market price of Glendale's common stock was $25 per share during 2026. Net income for the year ended December 31, 2026, was $1,100,000. What should be Ajax's 2026 diluted earnings per common share, rounded to the nearest penny? 2.Ajax Corporation...

On December 31, 2015, Berclair Inc. had 600 million shares of common stock and 17 million...

On December 31, 2015, 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, 2016, Berclair purchased 120 million shares of its common stock as treasury stock. Berclair issued a 6% common stock dividend on July 1, 2016. four million treasury shares were sold on October 1. Net income for the year ended December 31, 2016, was $850 million. Also outstanding at December...

On December 31, 2015, Berclair Inc. had 442 million shares of common stock and 5 million...

On December 31, 2015, Berclair Inc. had 442 million shares of common stock and 5 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. Net income for the year ended December 31, 2016, was $1,050 million. Also outstanding at December 31 were incentive stock options granted to executives. The options were exercisable for 30 million common shares at an exercise price of $56 per share. During 2016, the market price of the common shares averaged $70...

Clark Fork, Inc. had 100,000 shares of common stock outstanding on December 31, 2014. The following...

Clark Fork, Inc. had 100,000 shares of common stock outstanding on December 31, 2014. The following changes occurred during 2015 and 2016: April 1, 2015 issued an additional 10,000 shares July 1, 2015 2:1 stock split October 1, 2015 5,000 treasury shares purchased December 1, 2015 reissued the 5,000 treasury shares March 1, 2016 50% stock dividend July 1, 2016 issued an additional 30,000 shares The 2016 income statement will include earnings per share computations for 2015 and 2016. For...

Ritz Company had the following stock outstanding and Retained Earnings at December 31, 2015: Common stock...

Ritz Company had the following stock outstanding and Retained Earnings at December 31, 2015: Common stock (par $1; outstanding, 420,000 shares) $ 420,000 Preferred stock, 8% (par $10; outstanding, 20,200 shares) 202,000 Retained earnings 892,000 On December 31, 2015, the board of directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared during 2013 or 2014. Three independent cases are assumed: Case A: The preferred stock is noncumulative; the total amount...

On December 31, 2020, Ainsworth, Inc., had 600 million shares of common stock outstanding. Sixteen million...

On December 31, 2020, Ainsworth, Inc., had 600 million shares of common stock outstanding. Sixteen million shares of 7%, $100 par value cumulative, nonconvertible preferred stock were sold on January 2, 2021. On April 30, 2021, Ainsworth purchased 30 million shares of its common stock as treasury stock. Twelve million treasury shares were sold on August 31. Ainsworth issued a 5% common stock dividend on June 12, 2021. No cash dividends were declared in 2021. For the year ended December...

On December 31, 2020, Ainsworth, Inc., had 460 million shares of common stock outstanding. Seventeen million...

On December 31, 2020, Ainsworth, Inc., had 460 million shares of common stock outstanding. Seventeen million shares of 8%, $100 par value cumulative, nonconvertible preferred stock were sold on January 2, 2021. On April 30, 2021, Ainsworth purchased 30 million shares of its common stock as treasury stock. Twelve million treasury shares were sold on August 31. Ainsworth issued a 5% common stock dividend on June 12, 2021. No cash dividends were declared in 2021. For the year ended December...

Question