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16-132Basic and diluted EPS. Presented below is information related to Berry Company. Net Income [including an extraordinary gain (net of tax) of...




Pr. 16-132—Basic and diluted EPS.
Presented below is information related to Berry Company.

1. Net Income [including an extraordinary gain (net of tax) of $70,000] $230,000

2. Capital Structure
a. Cumulative 8% preferred stock, $100 par,
6,000 shares issued and outstanding $600,000

b. $10 par common stock, 74,000 shares outstanding on January 1.
On April 1, 40,000 shares were issued for cash. On October 1,
16,000 shares were purchased and retired. $1,000,000

c. On January 2 of the current year, Berry purchased Raye Corporation.
One of the terms of the purchase was that if Berry 's net income for the
following year is $2400,000 or more, 50,000 additional shares would
be issued to Raye stockholders next year.

3. Other Information
a. Average market price per share of common stock during entire year $30
b. Income tax rate 30%

Instructions
Compute earnings per share for the current year.


Pr. 16-133—Basic and diluted EPS.
The following information was taken from the books and records of Simonic, Inc.:

1. Net income $ 280,000

2. Capital structure:
a. Convertible 6% bonds. Each of the 300, $1,000 bonds is convertible
into 50 shares of common stock at the present date and for the next
10 years. 300,000

b. $10 par common stock, 200,000 shares issued and outstanding
during the entire year. 2,000,000

c. Stock warrants outstanding to buy 16,000 shares of common stock
at $20 per share.

3. Other information:
a. Bonds converted during the year None
b. Income tax rate 30%
c. Convertible debt was outstanding the entire year
d. Average market price per share of common stock during the year $32
e. Warrants were outstanding the entire year
f. Warrants exercised during the year None

Instructions
Compute basic and diluted earnings per share.


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