Compute diluted earnings per share for lincoln company

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Reference no: EM132796158

Lincoln Company's net income for 2019 was $600,000. The tax rate was 20%. The only potentially dilutive securities outstanding were 800 options issued during 2018. Each option can be exercised for one share of common stock at $30 per share. None has been exercised, and 100,000 shares of common stock were outstanding during 2019. In addition, 2,000 shares of 6% $100 par non-cumulative preferred stock were outstanding. Lincoln's Board of Directors declares total dividends of $20,000 in 2019. The average price of Lincoln's common stock during 2019 was $50.

Instructions:

Problem (a) Compute basic earnings per share for 2019.

Problem (b) Compute diluted earnings per share for 2019.

Reference no: EM132796158

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