Compute the incremental shares using treasury-stock method

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Question - Backhome Company's net income for 2020 is $650,000, and 86,000 common shares were issued and outstanding during 2020. The only potentially dilutive securities outstanding were 25,000 stock options issued during 2019, each exercisable for one share at $20.50; none of these have been exercised. The average market price of Backhome's stock during 2020 was $25. Compute the incremental shares using the treasury-stock method. Also, compute the diluted earnings per share.

Reference no: EM133140569

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