Question
On June 1, 2018, Metlock Company and Bonita Company merged to form Windsor Inc. A total of 876,000 shares were issued to complete the merger.
On June 1, 2018, Metlock Company and Bonita Company merged to form Windsor Inc. A total of 876,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 637,000 shares of stock for cash. All 1,513,000 shares were outstanding on December 31, 2020. Windsor Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 44 shares of common at any interest date. None of the bonds have been converted to date. Windsor Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,491,000. (The tax rate is 20%.) Determine the following for 2020. (a) The number of shares to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.)
(1) | Basic earnings per share |
| ||||
---|---|---|---|---|---|---|
(2) | Diluted earnings per share |
|
(b) The earnings figures to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.)
(1) | Basic earnings per share |
| ||
---|---|---|---|---|
(2) | Diluted earnings per share |
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