Reference no: EM133154500

Question - Part 1 - On January 1, 2020, Warriors Corporation had 200,000 common shares outstanding (no preferred issued). On March 1, the corporation issued 55,000 new shares to raise additional capital. On July 1, the corporation declared and issued a 2 for 1 stock split. On October 1, the corporation purchased on the open market 200,000 of its shares at $ 35 each and retired them.

Using the actual number of months, calculate the weighted average number of common shares outstanding to be used in calculating earnings per share for 2020.

Part 2 - Throughout the calendar year 2020, Celtics Corporation has 500,000 common shares outstanding (no preferred shares issued). In addition, Celtics has $5,000,000 of 20-year, 6% bonds outstanding, issued at par in 2018. Each $1,000 bond is convertible into 25 common shares. Warriors reported a net income of $600,000 for calendar 2020. Their income tax rate is 25%.

Calculate Celtics' basic and diluted earnings per share for 2020.