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1. On January 1, 2024, XYZ Company had 200,000 shares of $0.25 par common stock outstanding. On May 1, 2024, XYZ sold 30,000 shares of common stock for $56 per share. XYZ had the following preferred stock and bonds outstanding at January 1, 2024. All securities had been sold at par or face value. Issue Date 5/1/2018 1/1/2021 1/1/2023 6/30/2023 12/31/2023 Type of Security 12%, $1,000 bonds, $750,000 6% cumulative convertible preferred stock, $100 par, 40,000 shares outstanding 6%, convertible $1,000 bonds, $1,000,000 10%, convertible $1,000 bonds, $600,000 8%, cumulative preferred stock, $50 par, 12,500 shares outstanding Conversion Terms None 4 shares common for each share of preferred 15 shares common for each $1,000 bond 30 shares of common for each $1,000 bond None XYZ had stock options outstanding at January 1, 2024, for the purchase of 20,000 shares of common stock for $30 per share. The average market price of the common stock for 2024 was $60 per share. XYZ paid no dividends during 2024. The 2024 net income was $1,026,000. The income tax rate is 30%.

1. On January 1, 2024, XYZ Company had 200,000 shares of $0.25 par common stock outstanding. On May 1, 2024, XYZ sold 30,000 shares of common stock for $56 per share. XYZ had the following preferred stock and bonds outstanding at January 1, 2024. All securities had been sold at par or face value. Issue Date 5/1/2018 1/1/2021 1/1/2023 6/30/2023 12/31/2023 Type of Security 12%, $1,000 bonds, $750,000 6% cumulative convertible preferred stock, $100 par, 40,000 shares outstanding 6%, convertible $1,000 bonds, $1,000,000 10%, convertible $1,000 bonds, $600,000 8%, cumulative preferred stock, $50 par, 12,500 shares outstanding Conversion Terms None 4 shares common for each share of preferred 15 shares common for each $1,000 bond 30 shares of common for each $1,000 bond None XYZ had stock options outstanding at January 1, 2024, for the purchase of 20,000 shares of common stock for $30 per share. The average market price of the common stock for 2024 was $60 per share. XYZ paid no dividends during 2024. The 2024 net income was $1,026,000. The income tax rate is 30%.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Instructions: Compute the basic and diluted earnings per share for XYZ for 2024. Round to two decimal places. Show all computations. 

1. On January 1, 2024, XYZ Company had 200,000 shares of $0.25 par common stock outstanding. On May 1, 2024, XYZ sold 30,000 shares of common stock for $56 per share. XYZ had the following preferred stock and bonds outstanding at January 1, 2024. All securities had been sold at par or face value. Issue Date 5/1/2018 1/1/2021 1/1/2023 6/30/2023 12/31/2023 Type of Security 12%, $1,000 bonds, $750,000 6% cumulative convertible preferred stock, $100 par, 40,000 shares outstanding 6%, convertible $1,000 bonds, $1,000,000 10%, convertible $1,000 bonds, $600,000 8%, cumulative preferred stock, $50 par, 12,500 shares outstanding Conversion Terms None 4 shares common for each share of preferred 15 shares common for each $1,000 bond 30 shares of common for each $1,000 bond None XYZ had stock options outstanding at January 1, 2024, for the purchase of 20,000 shares of common stock for $30 per share. The average market price of the common stock for 2024 was $60 per share. XYZ paid no dividends during 2024. The 2024 net income was $1,026,000. The income tax rate is 30%.
Transcribed Image Text:1. On January 1, 2024, XYZ Company had 200,000 shares of $0.25 par common stock outstanding. On May 1, 2024, XYZ sold 30,000 shares of common stock for $56 per share. XYZ had the following preferred stock and bonds outstanding at January 1, 2024. All securities had been sold at par or face value. Issue Date 5/1/2018 1/1/2021 1/1/2023 6/30/2023 12/31/2023 Type of Security 12%, $1,000 bonds, $750,000 6% cumulative convertible preferred stock, $100 par, 40,000 shares outstanding 6%, convertible $1,000 bonds, $1,000,000 10%, convertible $1,000 bonds, $600,000 8%, cumulative preferred stock, $50 par, 12,500 shares outstanding Conversion Terms None 4 shares common for each share of preferred 15 shares common for each $1,000 bond 30 shares of common for each $1,000 bond None XYZ had stock options outstanding at January 1, 2024, for the purchase of 20,000 shares of common stock for $30 per share. The average market price of the common stock for 2024 was $60 per share. XYZ paid no dividends during 2024. The 2024 net income was $1,026,000. The income tax rate is 30%.
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