Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. Throughout 2015, Smith had 520,000 shares of common stock outstanding. Smiths net income for the year ended December 31, 2015 was $4,688,000. Smiths income

5. Throughout 2015, Smith had 520,000 shares of common stock outstanding. Smiths net income for the year ended December 31, 2015 was $4,688,000. Smiths income tax rate is 22%.

During the entire year ending 12-31-15, Smith had 40,000 outstanding employee stock options. Each option had an exercise price of $40 per share of Smith common stock. During the year ended 12-31-15, the average market price of Smiths common stock was $50 per share.

As of 12-31-15, Smith had $6,000,000 of 4% convertible bonds. Smith issued the bonds at face value during 2012. The bonds can be converted into 200,000 shares of Smiths common stock.

What will Smith report as its diluted earnings per share for the year ended 12-31-15?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Chapters 1-30

Authors: David Haddock, John Price, Michael Farina

16th Edition

1260247902, 978-1260247909

More Books

Students also viewed these Accounting questions

Question

What are the pros and cons of credit? Critical T hinking

Answered: 1 week ago

Question

Is this public actively seeking information on this issue?

Answered: 1 week ago

Question

How much loyalty does this public have for your organization?

Answered: 1 week ago

Question

How influential does the organization see this public as being?

Answered: 1 week ago