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Compute basic earnings per share

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Reference no: EM132937396

Question - Assume that the following data relate to Fargo, Inc. for the year 2023:

Net income (30% tax rate) $3,000,000

Average common shares outstanding 2023 1,000,000 shares 10% cumulative convertible preferred stock:

Convertible into 80,000 shares of common $1,600,000

8% convertible bonds; convertible into 75,000 shares of common $2,500,000

Stock options:

Exercisable at the option price of $25 per share; average market price in 2023, $30 84,000 shares

Required - Compute (a) basic earnings per share, and (b) diluted earnings per share. Use anti-dilution sequencing if applicable.

Reference no: EM132937396

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