Question
Apex, Inc. had 300,000 shares of common stock outstanding on January 1, 2020, and had the following changes in its common stock during the period:
Apex, Inc. had 300,000 shares of common stock outstanding on January 1, 2020, and had the following changes in its common stock during the period: Mar 1, 2020: Issued 20,000 shares for cash; Jun 1, 2020: Purchased 30,000 shares; Jul 1, 2020: Stock split 2-1; Oct 1, 2020: Issued 10,000 shares for cash; Dec 1, 2020: Issued 20% stock dividend. Apex had 10,000 shares of convertible preferred stock outstanding throughout 2020. Each preferred stock is $100 par, 8%, and is convertible into 20 shares of common. Apex also had 500, 8%, convertible bonds outstanding throughout 2020. Each $1,000 bond is convertible into 50 shares of common. The bonds sold originally at face value. There were 10,000 options to buy common stock at $20 a share outstanding. The market price for the common stock averaged $25 during 2020. Reported net income for 2020 was $500,000 with a 40% tax rate. Common shareholders received $2 per share dividends after preferred dividends were paid in 2020. Calculate the Basic EPS and the Diluted EPS.
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