In 2020, Xonacs acquired Realtest Service. The acquisition agreement included a commitment by Xonacs to the shareholders
Question:
In 2020, Xonacs acquired Realtest Service. The acquisition agreement included a commitment by Xonacs to the shareholders of Realtest that if 2021 net income exceeded \(\$ 250,000\), an additional 50,000 shares of Xonacs stock would be issued to the shareholders in 2022 . Realtest's net income in 2020 was \(\$ 255,000\).
Required
a. How many contingent shares would Xonacs recognize in its calculation of 2020 diluted EPS?
b. Suppose Realtest's earnings in 2020 were \(\$ 200,000\). How many contingent shares would Xonacs recognize in its calculation of 2020 diluted EPS?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781618533135
2nd Edition
Authors: Hanlon, Hodder, Nelson, Roulstone, Dragoo
Question Posted: