PROBLEM 16-6 - share 6,736,000 Convertible preferred...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
PROBLEM 16-6
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(a) The number of shares used to compute basic earnings per share is 6,736,000, as calculated below. Event Dates Outstanding Shares Outstanding Restatement Fraction of Year Weighted Shares Beginning Balance, including 5% stock dividend Jan. 1–Apr. 1 3,150,000 2.0 3/12 1,575,000 Conversion of preferred stock Apr. 1–July 1 3,360,000 2.0 3/12 1,680,000 Stock split July 1–Aug. 1 6,720,000 1/12 560,000 Issued shares for building Aug. 1–Nov. 1 7,020,000 3/12 1,755,000 Purchase of Treasury stock Nov. 1–Dec. 31 6,996,000 2/12 1,166,000 Total number of common shares to compute basic earnings per share 6,736,000 (b) The number of shares used to compute diluted earnings per share is 7,891,000, as shown below. Number of shares to compute basic earnings per
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: share 6,736,000 Convertible preferred stockstill outstanding (500,000 X 2 X 1.05) 1,050,000 Convertible preferred stockconverted (200,000 X 2 X 1.05 X 3/12) 105,000 Number of shares to compute diluted earnings per share 7,891,000 (c) The adjusted net income to be used as the numerator in the basic earnings per share calculation for the year ended December 31, 2004, is $11,900,000, as computed below. After-tax net income $13,550,000 Preferred stock dividends March 31 (700,000 X $.75) $ 525,000 June 30, September 30, and December 31 (500,000 X $.75 X 3) 1,125,000 1,650,000 Adjusted net income $11,900,000...
View Full Document

This note was uploaded on 10/22/2008 for the course ACC 449 taught by Professor Long during the Summer '08 term at University of Phoenix.

Page1 / 3

PROBLEM 16-6 - share 6,736,000 Convertible preferred...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online