Solution-Compute basic and diluted earnings per share

Compute basic and diluted earnings per share

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Reference no: EM131802281

Earnings per share.

Colson Corp. had $700,000 net income in 2015. On January 1, 2015 there were 200,000 shares of common stock outstanding. On April 1, 20,000 shares were issued and onSeptember 1, Colson bought 30,000 shares of treasury stock. On Oct 1, Colson declared a 10% Stock Dividend. As of Jan 1st, there are 30,000 stock options outstanding. TheOption Excercise price was $40 per share and the market price of the common stockaveraged $50 during 2015. The tax rate is 40%.

During 2015, there were 40,000 shares of convertible preferred stock outstanding. Thepreferred is $100 par, pays $3.50 a year dividend, and is convertible into three shares ofcommon stock.

Colson issued $2,000,000 of 8% convertible bonds at face value during 2014. Each$1,000 bond is convertible into 30 shares of common stock.

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Compute Basic and Diluted earnings per share for 2015 in Good form, show all computations.

Reference no: EM131802281

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Compute basic and diluted earnings per share

Reference no: EM131802281

Reference no: EM131802281

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