In: Accounting
At December 31, 20X1, Welsch had 500,000 shares of common stock outstanding. On October 1, 20X2, an additional 120,000 shares of common stock were issued for cash. Welsch also had $4,000,000 of 8% convertible bonds outstanding at December 31, 20X2, which are convertible into 100,000 shares of common stock. The bonds are dilutive in the 20X2 EPS computation. No bonds were issued or converted into common stock during 20X2. What is the number of shares that should be used in computing diluted EPS for the year ended December 31, 20X2?
Hence, Number of shares that should be used in computing diluted EPS for the year ended December 31, 20X2 are 630,000
For formulas and calculations, refer to the image below -
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