Zambrano Companys net income for 2012 is $40,000. The only potentially dilutive securities outstanding were 1,000 options

Question:

Zambrano Company’s net income for 2012 is $40,000. The only potentially dilutive securities outstanding were 1,000 options issued during 2011, each exercisable for one share at $8. None has been exercised, and 10,000 shares of common were outstanding during 2012. The average market price of Zambrano’s stock during 2012 was $20.

Instructions
  (a) Compute diluted earnings per share. (Round to the nearest cent.)
  (b) Assume the same facts as those assumed for part (a), except that the 1,000 options were issued on October 1, 2012 (rather than in 2011). The average market price during the last 3 months of 2012 was $20.

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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-0470587287

14th Edition

Authors: kieso, weygandt and warfield.

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