Q2: Colson Corp. had $900,000 net income in 2018. On January
1, 2018 there were 600,000
shares...
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Q2: Colson Corp. had $900,000 net income in 2018. On January1, 2018 there were 600,000
shares of common stock outstanding. On March 1, 400,000 shareswere issued and on September 1, Colson bought 100,000 shares oftreasury stock. The tax rate is 40%.
In addition, Colson issued $2,000,000 of 6% convertible bondsat face value during 2017. Each $1,000 bond is convertible into 100shares of common stock. No bond was converted into common stock in2018.
Required:
a) Compute basic earnings per share for 2018.
b) Compute diluted earnings per share for 2018.
(please type the answer)
Answer & Explanation
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3.9 Ratings (781 Votes)
a The basic earning per share is calculated as follows Basic EPS Net income Weighted average number of share outstanding 900000 1000000 shares 090 per share
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