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P16-9 - 2 Complex capital structure allows both basic...

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A) Weighted-Average Shares Before Stock Dividend Total June 1, 2009 $1,000,000.00 Issue September 1, 2009 $400,000.00 Total May 31, 2011 $1,400,000.00 1) Total 2) B) AGASSI CORPORATION Income Statement May 31, 2010 and 2011 2011 Income from operations before income taxes $1,400,000 Income taxes 560,000 Income before extraordinary item 840,000 240,000 Net income 600,000 Per share of common stock Income before extraordinary item $0.36 Extraordinary loss, net of tax 0.14 Net income $0.21 C) Extraordinary item—loss from earthquake, less applicable income taxes of $160,000 1. Simple capital structure consists only of common stock. Agassi Corporation has a s has not issued any convertible securities, warrants, or stock options, and there are no
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Unformatted text preview: 2. Complex capital structure allows both basic earnings per share and diluted earning diluted earnings per share assumes the conversion of convertible debt. After Stock Dividend $1,200,000.00 $480,000.00 $1,680,000.00 $300,000.00 $1,260,000.00 $1,560,000.00 $1,680,000.00 2010 $660,000 264,000 396,000 396,000 $0.10 $0.10 – simple capital structure because there is nothing that is dilutive of its earnings per common share. It existing rights or securities . gs per share. Basic earnings per share uses weighted average of common stock outstanding. The...
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