Question

In: Accounting

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 began 2024 with 100,000 common shares outstanding. On April 1, 2024 they issued 20,000 additional common shares. On August 1, 2024 they declared a 2 for 1 stock split. What is the weighted-average number of common shares for the year 2024?

Solutions

Expert Solution

1
Calculate weighted average number of shares to calculated diluted earnings per share
Shares outstanding at beginning of period        220,000
Shares under stock option            8,000 40000 - (40000*20)/25
Weighted average no of shares        228,000
Diluted earnings per share Net income/Weighted average no of shares
Diluted earnings per share 1100000/228000
Diluted earnings per share $4.82
Thus, diluted earnings per share is $4.82
2
Calculate weighted average number of shares outstanding
Common shares outstanding (100000*2)        200,000
Additional shares issued (20000*2*9/12)          30,000
Weighted average no of shares outstanding        230,000
Thus, weighted average number of shares outstanding is $230,000

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

On January 1, 2027, Ajax Corporation had 10 million shares of common stock, issued and outstanding....
On January 1, 2027, Ajax Corporation had 10 million shares of common stock, issued and outstanding. On October 1, 2027 Ajax issued an additional 1 million shares of common stock. Ajax also has $40 million face value, 6.25% convertible bonds outstanding for the entire year. The bonds are convertible into 2 million common shares. Ajax has a tax rate of 40% and net income of $14 million in 2027. What is Ajax’s diluted earnings per share for 2027? $1.35 $1.27...
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...
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...
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...
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...
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 47,000 shares for cash. On January 1, 2021, XYZ issued 17,000 shares of convertible preferred stock. The preferred stock had a par value of $100 per share and paid a 6% dividend. Each share of preferred stock is convertible into 9 shares of common. During 2021, XYZ paid the regular annual dividend on the preferred and common stock. Net...
At December 31, 2014, Emley Company had 1,200,000 shares of common stock outstanding. On October 1,...
At December 31, 2014, Emley Company had 1,200,000 shares of common stock outstanding. On October 1, 2015, an additional 400,000 shares of common stock were issued. In addition, Emley had $10,000,000 of 6% convertible bonds outstanding at December 31, 2014, which are convertible into 800,000 shares of common stock. No bonds were converted into common stock in 2015. The net income for the year ended December 31, 2015, was $3,750,000. Assuming the income tax rate was 30%, what should be...
At December 31, 20X1, Welsch had 500,000 shares of common stock outstanding. On October 1, 20X2,...
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...
On December 31, 2020, Jackson Company had 100,000 shares of common stock outstanding and 27,000 shares...
On December 31, 2020, Jackson Company had 100,000 shares of common stock outstanding and 27,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2021, Jackson purchased 14,000 shares of common stock on the open market as treasury stock for $25 per share. Jackson sold 5,000 treasury shares on September 30, 2021, for $27 per share. Net income for 2021 was $170,905. Also outstanding during the year were fully vested incentive stock options giving key executives the...
On December 31, 2017, Jackson Company had 100,000 shares of common stock outstanding and 30,000 shares...
On December 31, 2017, Jackson Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2018, Jackson purchased 24,000 shares of common stock on the open market as treasury stock paying $45 per share. Jackson sold 6,000 of the treasury shares on September 30, 2018, for $47 per share. Net income for 2018 was $180,905. Also outstanding at December 31, 2017, were fully vested incentive stock options giving...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT