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Assume that the following data relative to Kane Company for 2018 is available.
Net income $2,100,00
-Transactions in common shares Change cumulative
Jan 1 2018, Beginning number 700,000
Mar 1 2018, Purchase of treasury shares (60,000) 640,000
June 1 2018, Stock split 2-1 640,000 1,280,000
Nov 1 2018 Issuance of shares 240,000 1,520,000
-6% cumulative convertible preferred stock.
Sold at par, convertible into 200,000 shares of common (adjusted for split) $1,000,000
- stock options.
Exercible at the option price of $25 per share. Average market price in 2018, $30 ( market price and option price adjusted for split.) 90,000 shares
Instructions:
(A) compute the basic earnings per share for 2018( round to the nearest penny)
(B) compute the diluted earnings per share for 2018. (round to the nearest penny)
Answer & Explanation
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