Throughout 2020, Moon Ltd. had 1,200,000 common shares outstanding. As well, the corporation paid $300,000 in...

Throughout 2020, Moon Ltd. had 1,200,000 common shares outstanding. As well, the corporation paid $300,000 in preferred dividends and reported net income of $5,100,000 for 2020. In connection with the acquisition of a subsidiary company in June 2019, Moon is required to issue 50,000 additional common shares on July 1, 2021, to the former owners of the subsidiary.

Moon’s diluted earnings per share for 2020 should be:

$4.25.

$4.08.

$4.00.

$3.84.

Expert Solution

WORKING NOTES:

	CALCULATION OF THE TOTAL SHARES OUTSTANDING AT END OF YEAR

	Total Shares Outstanding	12,00,000	Shares
	Add: Addittional Shares required to issue	50,000	Shares
	Total Adjusted Shares Outstanding	12,50,000	Shares

SOLUTION:
	CALCULATION OF DILUTED EARNING PER SHARES

	Diluted Earning Per Shares =	(Net Income	-	Preferred Dividends)	"/"	Adjusted Shares Outstanding
	Diluted Earning Per Shares =	$ 51,00,000	-	$ 3,00,000	"/"	12,50,000
	Diluted Earning Per Shares =	$ 48,00,000	"/"	12,50,000
	Diluted Earning Per Shares =	3.84

Answer = Option 4 = $ 3.84

ekkarill92 answered 1 year ago

Ferry Corporation had 300,000 shares of common stock outstanding at December 31, 2020. In addition, it...

Ferry Corporation had 300,000 shares of common stock outstanding at December 31, 2020. In addition, it had 90,000 stock options outstanding, which had been granted to certain executives on June 30, 2020, and which gave them the right to purchase shares of Ferry's stock at an option price of $35 per share. The average market price of Ferry's common stock for 2020 was $50. Net income was $1,000,000. SHOW ALL COMPUTATIONS> Compute EPS. Compute DEPS.

Ferry Corporation had 300,000 shares of common stock outstanding at December 31, 2020. In addition,...

Ferry Corporation had 300,000 shares of common stock outstanding at December 31, 2020. In addition, it had 90,000 stock options outstanding, which had been granted to certain executives on June 30, 2020, and which gave them the right to purchase shares of Ferry's stock at an option price of $35 per share. The average market price of Ferry's common stock for 2020 was $50. Net income was $1,000,000. SHOW ALL COMPUTATIONS> Compute EPS. Compute DEPS.

Crane Corporation reported net income of $234,910 in 2020 and had 152,000 common shares outstanding throughout...

Crane Corporation reported net income of $234,910 in 2020 and had 152,000 common shares outstanding throughout the year. Also outstanding all year were 51,000 (written) options to purchase common shares at $10 per share. The average market price for the common shares during the year was $15 per share. QUESTION: Calculate the diluted earnings per share. (Round answer to 2 decimal places, e.g. 15.25.) Diluted earnings per share $______

On January 1, 2020, Sandhill Ltd. had 570,000 common shares outstanding. During 2020, it had the...

On January 1, 2020, Sandhill Ltd. had 570,000 common shares outstanding. During 2020, it had the following transactions that affected the common share account: Feb. 1 Issued 195,000 shares. Mar. 1 Issued a 17% stock dividend. May 1 Acquired 222,000 common shares and retired them. June 1 Issued a 2-for-1 stock split. Oct. 1 Issued 64,000 shares. The company’s year end is December 31. QUESTIONS: A) Determine the weighted average number of shares outstanding as at December 31, 2020. B)...

1. On January 1, 2020, Blossom Ltd. had 498,000 common shares outstanding. During 2020, it had...

1. On January 1, 2020, Blossom Ltd. had 498,000 common shares outstanding. During 2020, it had the following transactions that affected the common share account: Feb. 1 Issued 150,000 shares. Mar. 1 Issued a 10% stock dividend. May 1 Acquired 162,000 common shares and retired them. June 1 Issued a 2-for-1 stock split. Oct. 1 Issued 40,000 shares. The company’s year end is December 31.Determine the weighted average number of shares outstanding as at December 31, 2020. (Round answer to...

On December 31, 2020, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares...

On December 31, 2020, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred shareholders, respectively, on December 15, 2021. On February 28, 2021, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow’s net income...

On January 1, 2016, Alpha Corporation had 300,000 shares of common stock outstanding with a par...

On January 1, 2016, Alpha Corporation had 300,000 shares of common stock outstanding with a par value of $3 per share. On March 31, Alpha Corporation declared a 10% stock dividend when the market value was $8 per share. Use this information to prepare the General Journal entry (without explanation) for March 31. If no entry is required then write "No Entry Required."

At January 1, Strunk Corp. had 1,200,000 common shares outstanding. Strunk issued 240,000 additional common shares...

At January 1, Strunk Corp. had 1,200,000 common shares outstanding. Strunk issued 240,000 additional common shares on March 1 and 180,000 more on June 1. On November 1, Strunk repurchased 60,000 common shares as treasury stock. For purposes of basic earnings per share, the weighted average shares outstanding for the year is 1,090,000 shares 1,190,000 shares 1,380,000 shares 1,560,000 shares None of the above 2. Davies Inc. had 1,400,000 outstanding shares of common stock at the beginning of the current...

Throughout 2019, H had 15,000,000 shares of common stock issued and outstanding and 100,000 shares of...

Throughout 2019, H had 15,000,000 shares of common stock issued and outstanding and 100,000 shares of 5%, $100 par value cumulative preferred stock issued and outstanding. H's net income for 2019 was $7,700,000. During 2019 H neither declared nor paid any kind of dividend. H's income tax rate is 25%. During the entire year ending 12-31-19, H had 750,000 outstanding and exercisable employee stock options that were granted to employees during 2016. Each option has an exercise price of $40...

6. Moon Corporation (E&P of $700,000) has 4,000 shares of common stock outstanding. The shares are...

6. Moon Corporation (E&P of $700,000) has 4,000 shares of common stock outstanding. The shares are owned as follows: Andy 2,000 shares Darlene (Andy’s daughter) 1,500 shares Wendy (Andy’s aunt) 500 shares In the current year, Moon redeems all of Andy’s shares. Determine whether the redemption can qualify for sale or exchange treatment under the complete termination of a shareholder’s interest rules in each of the following independent circumstances. Assume that in a. – d Andy completes and submits the...

Question