Question
On December 31, 2020, Broadway Theatre Productions had 500,000 shares of common stock outstanding. On April 1, 2021, Broadway purchased and retired 42,000 shares of
On December 31, 2020, Broadway Theatre Productions had 500,000 shares of common stock outstanding. On April 1, 2021, Broadway purchased and retired 42,000 shares of its outstanding common stock. Broadway issued a 10% common stock dividend on August 1, 2021. Broadway issued (sold) 18,000 common shares on October 31, 2021. Net income for the year ended December 31, 2021, was $985,000 and the tax rate was 21%. In addition to the common stock, Broadway has outstanding (as of 12/31/2021):
Convertible preferred stock -> 35,000 cumulative preferred shares of 8%, $10 par convertible into 7,000 common shares;
Convertible bonds -> 9%, $1,200,000 face value convertible into 75,000 common shares;
Incentive Stock Options -> A total of 3,000 incentive stock options were granted in 2016 to key employees. The options were exercisable only after 2020 for 3,000 common shares at an exercise price of $25 per share. The average market price of the common shares during 2021 was $30 per share. The stock options were exercised on October 1, 2021.
Required -> Compute Broadways basic AND diluted EPS for the year ended December 31, 2021.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started