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How much income is available to all claimants

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Question - The income Statement for Kevin Co, inc. for the period ending December 31, 2017, is below:

Sales Revenue 247,000

Operating Expenses 160,000

Interest Expense 13,000

Net Income 74,000

Note, Kevin Company exists in paradise (the land of no taxes).

During 2017, kevin Company had the following transactions involving its common stock:

January 1: Beginning balance = 60,000 shares

March 1: issued 11,000 new shares

September 1: 2:1 stock split

October 1: Purchased 12,000 Treasury shares

November 1: 8% stock dividend.

Kevin Company's financial statements also revealed that Kevin Company had 8,000

Shares of 10%, $6 par value cumulative preferred stock issued and outstanding throughout the year.

Please answer the following questions. Show all work for credit.

1. How much 2017 income is available to all claimants (creditors preferred shareholders and common shareholders) to Kevin Company assets?

2. How much 2017 income is available to Preferred and Common shareholders combined?

3. How much 2017 income is available to common shareholders?

4. What is Kevin Company's weighted average shares outstanding for 2017?

5. Compute Kevin Company's basic Earnings per share for 2017. Please round 2 decimal places.

6. Outstanding on January 1, 2017, were incentive stock options granted to key executives for 37,000 common stock shares (number of shares adjusted for the stock split and stock dividend) at an exercise price of $28 per share. During 2017, the market price of the common shares averaged $35 per share. Compute Kevin Company's fully diluted Earnings per share for 2017. Please round to 2 decimal places. Show all work.

Reference no: EM133176814

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