Stanley Department Stores reported net income of $881,000 for the year ended December 31, 2021. Additional...

Stanley Department Stores reported net income of $881,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding at Jan. 1, 2021 125,000 Incentive stock options (vested in 2020) outstanding throughout 2021 36,000 (Each option is exercisable for one common share at an exercise price of $26.50) During the year, the market price of Stanley’s common stock averaged $31.80 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley’s only debt consisted of $43,000 of 10% short-term bank notes. The company’s income tax rate is 25%.

Required: Compute Stanley’s basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Do not round intermediate calculations).

Expert Solution

Computation of Earings Per share Dec 31 2021

Net Income		881000

Less Income Tax @ 25%		220250

Income after Tax		660750

Basic Earing per share		=660750/130000	5.08

Diluted Earing per share		=660750/166000	3.98

		Weighted average Shares
Shares outstand on Jan 1 2021	125000	125000X 12/12	125000
Share issued on 30th Aug 2021	15000	15000X 4/12	5000
Total share capital			130000


		Weighted average Shares
Shares outstand on Jan 1 2021	125000	125000X 12/12	125000
Share issued on 30th Aug 2021	15000	15000X 4/12	5000
Stock option Outstanding	36000	36000X 12/12	36000
Diluted Outstanding share capital		166000

For computaton of diluted share captil we need to include outstanding or elibile share capital during the year.

ekkarill92 answered 1 year ago

Stanley Department Stores reported net income of $863,000 for the year ended December 31, 2021. Additional...

Stanley Department Stores reported net income of $863,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding at Jan. 1, 2021 120,000 Incentive stock options (vested in 2020) outstanding throughout 2021 36,000 (Each option is exercisable for one common share at an exercise price of $26.00) During the year, the market price of Stanley’s common stock averaged $31.20 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley’s only debt consisted of $42,000 of 10% short-term...

For the year ended December 31, 2021, Norstar Industries reported net income of $655,000. At January...

For the year ended December 31, 2021, Norstar Industries reported net income of $655,000. At January 1, 2021, the company had 900,000 ordinary shares outstanding. The following changes in the number of shares occurred during 2021: April 30 Sold 60,000 shares in a public offering. May 24 Declared and distributed a bonus issue of 5%. June 1 Issued 72,000 shares as part of the consideration for the purchase of assets from a subsidiary. Required: Compute Norstar's earnings per share for...

Perry Corporation reported net income of $136,200 for the year ended December 31, 2021. January 1...

Perry Corporation reported net income of $136,200 for the year ended December 31, 2021. January 1 balances in accounts receivable and accounts payable were $28,800 and $27,400, respectively. Year-end balances in these accounts were $30,500 and $22,700, respectively. Assuming that all relevant information has been presented, Perry's cash flows from operating activities would be: Multiple Choice $137,900. $76,900. $142,600. $129,800.

For the year ended December 31, 2018, Norstar Industries reported net income of $655,000. At January...

For the year ended December 31, 2018, Norstar Industries reported net income of $655,000. At January 1, 2018, the company had 900,000 common shares outstanding. The following changes in the number of shares occurred during 2018: Apr. 30 Sold 60,000 shares in a public offering. May 24 Declared and distributed a 5% stock dividend. June 1 Issued 72,000 shares as part of the consideration for the purchase of assets from a subsidiary. Required: Compute Norstar's earnings per share for...

For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,052,000. Selected...

For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,052,000. Selected information for 2021 from Fidelity’s records follows: Interest income on municipal governmental bonds $ 108,000 Depreciation claimed on the 2021 tax return in excess of depreciation on the income statement 132,000 Carrying amount of depreciable assets in excess of their tax basis at year-end 240,000 Warranty expense reported on the income statement 64,000 Actual warranty expenditures in 2021 54,000 Fidelity's income tax rate is...

For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,048,000. Selected...

For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,048,000. Selected information for 2021 from Fidelity’s records follows: Interest income on municipal governmental bonds $ 104,000 Depreciation claimed on the 2021 tax return in excess of depreciation on the income statement 128,000 Carrying amount of depreciable assets in excess of their tax basis at year-end 232,000 Warranty expense reported on the income statement 62,000 Actual warranty expenditures in 2021 52,000 Fidelity's income tax rate is...

Blimp Co. reported net income of P1,000,000 for the year ended December 31, 2020. Upon further...

Blimp Co. reported net income of P1,000,000 for the year ended December 31, 2020. Upon further inspection of its records, the entity failed to recognized prepaid insurance of P12,000; accrued expense and revenue of P2,000 and P4,000, respectively. An advance payment of P10,000 from a customer was also entirely recognized as a liability. It was found out that Blimp has already earned 30% of it. Lastly, sales from a customer amounting to P20,000 was incorrectly recognized as P2,000. 1. Following...

For the year ended December 31, 2017, Transformers Inc. reported the following: Net Income $305068 Preferred...

For the year ended December 31, 2017, Transformers Inc. reported the following: Net Income $305068 Preferred dividends paid 54210 Common dividends paid 9619 Unrealized holding loss, net of tax 3543 Retained Earnings, beginning balance 389503 Common Stock 177628 Accumulated Other Comprehensive Income, beginning balance 22896 What would Transformers report as the ending balance of Retained Earnings?

The Massoud Consulting Group reported net income of $1,354,000 for its fiscal year ended December 31, 2011.

The Massoud Consulting Group reported net income of $1,354,000 for its fiscal year ended December 31, 2011. In addition, during the year the company experienced a foreign currency translation adjustment gain of $240,000 and had unrealized losses on investment securities of $80,000. The company's effective tax rate on all items affecting comprehensive income is 30%. Each component of other comprehensive income is displayed net of tax. Required: Prepare a combined statement of income and comprehensive income for 2011, beginning with...

THE CULLUMBER COMPANY LTD. Income Statement Year Ended December 31 2021 2020 Net sales $1,779,530 $1,819,610...

THE CULLUMBER COMPANY LTD. Income Statement Year Ended December 31 2021 2020 Net sales $1,779,530 $1,819,610 Cost of goods sold 1,091,290 1,028,920 Gross profit 688,240 790,690 Operating expenses 521,960 422,530 Profit from operations 166,280 368,160 Interest expense 25,650 18,630 Profit before income tax 140,630 349,530 Income tax expense 42,189 104,859 Profit $98,441 $244,671 THE CULLUMBER COMPANY LTD. Balance Sheet December 31 Assets 2021 2020 Current assets Cash $112,631 $67,485 Accounts receivable 102,723 112,506 Inventory 141,460 123,690 Total current assets 356,814...

Question