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which enabled them to buy 2 3 0 , 0 0 0 common shares at $ 1 9 . 0 0 each. Jupp Jellies' shares
which enabled them to buy common shares at $ each. Jupp Jellies' shares traded
at an annual average price of $ each. All options remained outstanding at the end of the
year.
And finally, the company reported net income of $ There was nothing to report for
Discontinued Operations.
With your meeting having concluded, Ms Jell, almost apologetically, handed you a list of questions she
wanted you to resolve and insisted that you support your responses with clear detailed computations. She
did add that there would be other questions arising from related transactions which were to follow once
this one was resolved.
REQUIRED:
a Determine the weighted average number of shares to determine the basic earnings per share for
b Determine the basic earnings per share for assuming
i the preferred shares were cumulative.
ii the preferred shares were not cumulative For This Question Only
c Identify the potentially dilutive securities which could be included in the computation of diluted
earnings per share. Be sure to support your answer with detailed computations and rank these
securities where required.
d Determine the diluted earnings per share to be reported by the company in assuming preferred
shares were cumulative.
e For this part only, assume that the net income of $ was as stated above but included an
aftertax gain of $ from discontinued operations. Assume the preferred shares were
cumulative. Determine the basic and diluted earnings per share to be disclosed for and show
how they would be reported. Hint: Recalculate the basic and diluted earnings per share for both
continuing and discontinued operations
f For This Part Only, assume that the company declared a for stock split on June What would
be the revised weighted average number of shares for determining the basic earnings per share.
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