Compute the basic earnings per share

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Question - Assume that the following data relative to Kane Company for 2013 is available:

Net Income $2,100,000

Transactions in Common Shares

Change

Cumulative

Jan. 1, 2013, Beginning number

 

700,000

Mar. 1, 2013, Purchase of treasury shares

(60,000)

640,000

June 1, 2013, Stock split 2-1

640,000

1,280,000

Nov. 1, 2013, Issuance of shares

180,000

1,460,000

8% Cumulative Convertible Preferred Stock

Sold at par, convertible into 200,000 shares of common (adjusted for split). $1,000,000

Stock Options

Exercisable at the option price of $25 per share. Average market price in 2013, $30 (market price and option price adjusted for split). 90,000 shares

Instructions -

(a) Compute the basic earnings per share for 2013. (Round to the nearest penny.)

(b) Compute the diluted earnings per share for 2013. (Round to the nearest penny.)

Reference no: EM132490997

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