Earnings per share – basic and diluted

Assume that the following data relative to Eddy company for 2004 is available:Net Income: $1,400,000Transactions in Common shares change cumulative

1/1/04, beginning number 500,000

3/1/04 (60,000) 440,000

6/1/04 440,000 880,000

11/1/04, Issuance of shares 120,000 1,000,0008% cumulative convertible preferred stock

sold at par, convertible into 200,000 shares

of common (adjusted for split) $1,000,000Stock options

Exercisable at the option price of $25 per share.

Average market price in 2004, $30

(market price and option price adjusted for split) 600,000 sharesInstructions:

(A) compute the basic earnings per share for 2004. (Round to the nearest penny.)

(B) compute the diluted earnings per share for 2004. (Round to the nearest penny.)The solution explains how to calculate the basic and diluted earnings per share

Earnings per share – basic and diluted

Assume that the following data relative to Eddy company for 2004 is available:Net Income: $1,400,000Transactions in Common shares change cumulative

1/1/04, beginning number 500,000

3/1/04 (60,000) 440,000

6/1/04 440,000 880,000

11/1/04, Issuance of shares 120,000 1,000,0008% cumulative convertible preferred stock

sold at par, convertible into 200,000 shares

of common (adjusted for split) $1,000,000Stock options

Exercisable at the option price of $25 per share.

Average market price in 2004, $30

(market price and option price adjusted for split) 600,000 sharesInstructions:

(A) compute the basic earnings per share for 2004. (Round to the nearest penny.)

(B) compute the diluted earnings per share for 2004. (Round to the nearest penny.)The solution explains how to calculate the basic and diluted earnings per share

Earnings per share – basic and diluted

Assume that the following data relative to Eddy company for 2004 is available:Net Income: $1,400,000Transactions in Common shares change cumulative

1/1/04, beginning number 500,000

3/1/04 (60,000) 440,000

6/1/04 440,000 880,000

11/1/04, Issuance of shares 120,000 1,000,0008% cumulative convertible preferred stock

sold at par, convertible into 200,000 shares

of common (adjusted for split) $1,000,000Stock options

Exercisable at the option price of $25 per share.

Average market price in 2004, $30

(market price and option price adjusted for split) 600,000 sharesInstructions:

(A) compute the basic earnings per share for 2004. (Round to the nearest penny.)

(B) compute the diluted earnings per share for 2004. (Round to the nearest penny.)The solution explains how to calculate the basic and diluted earnings per share

Earnings per share – basic and diluted

1/1/04, beginning number 500,000

3/1/04 (60,000) 440,000

6/1/04 440,000 880,000

11/1/04, Issuance of shares 120,000 1,000,0008% cumulative convertible preferred stock

sold at par, convertible into 200,000 shares

of common (adjusted for split) $1,000,000Stock options

Exercisable at the option price of $25 per share.

Average market price in 2004, $30

(market price and option price adjusted for split) 600,000 sharesInstructions:

(A) compute the basic earnings per share for 2004. (Round to the nearest penny.)

(B) compute the diluted earnings per share for 2004. (Round to the nearest penny.)The solution explains how to calculate the basic and diluted earnings per share