Question
For the year ended December 31, 2020, Joey Co. reported Net Income of $1,600,000. At January 1, 2020 the company had 900,000 shares of common
For the year ended December 31, 2020, Joey Co. reported Net Income of $1,600,000. At January 1, 2020 the company had 900,000 shares of common stock outstanding. Joey Co. also had $1,000,000 of 6% cumulative preferred stock. No preferred dividends were paid in 2020 and the preferred stock is non-convertible. The following changes in the number of shares occurred during 2020:
April 1: Sold 60,000 shares of common stock.
May 31: Declared and Distributed a 20% Stock Dividend
July 1: Issued 80,000 shares of common stock
Required:
1. | Compute Joey Cos Basic earnings per share for the year ended December 31, 2020. |
2. | Given the facts as presented above, Joey Co would have to report Diluted EPS at 12/31/2020.
TRUE or FALSE [Circle One]
2(A) Briefly explain why you chose True or False |
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