Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

6 Problem 19-17 (Algo) EPS; options; convertible preferred; additional shares [LO19-4, 19-5, 19-6, 19-7, 19- 8, 19-9) 15 points On January 1, 2021, Tonge Industries

image text in transcribed

6 Problem 19-17 (Algo) EPS; options; convertible preferred; additional shares [LO19-4, 19-5, 19-6, 19-7, 19- 8, 19-9) 15 points On January 1, 2021, Tonge Industries had outstanding 660,000 common shares ($1 par) that originally sold for $30 per share, and 9,000 shares of 10% cumulative preferred stock ($100 par), convertible into 90,000 common shares. On October 1, 2021, Tonge sold and issued an additional 16,000 shares of common stock at $33. At December 31, 2021, there were 25,000 incentive stock options outstanding, issued in 2020, and exercisable after one year for 25,000 shares of common stock at an exercise price of $40. The market price of the common stock at year-end was $58. During the year, the price of the common shares had averaged $50. Net income was $800,000. The tax rate for the year was 25%. Required: Compute basic and diluted EPS for the year ended December 31, 2021. (Round "Earnings per share" answers to 2 decimal places. Enter your answers in thousands.) Answer is complete but not entirely correct. Numerator Denominator Earnings per share 1.07 Basic 1 $ $ 710,000 800,000 664,000 X 779,000 X Diluted $ 1.03

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

Financial Accounting

Authors: Robert F. Meigs, Jan R. Williams, Susan F Haka, Mark S. Bettner

10th Edition

0072316373, 978-0072316377

More Books

Students also viewed these Accounting questions