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a. Compute basic EPS. b. Compute diluted EPS.

a. Compute basic EPS. b. Compute diluted EPS.

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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Computing EPS: Convertible Preferred with Partial Conversion Bridgeman Company reported the following data for the current year. °Net income, $2,220,000. • Common shares outstanding at the beginning of the year, 800,000. °Nonconvertible cumulative preferred stock, $100 par, $8 dividend per share per year, 100,000 shares outstanding all year. ° Issued 200,000 shares of common stock on October 1. ° Convertible cumulative preferred stock, $100 par, $7 dividend per share per year, 50,000 shares outstanding at the beginning of the year. On March 31, 20,000 shares of preferred stock converted to 40,000 common shares. For both preferred stock issues, assume dividends are paid for the time they are held. a. Compute basic EPS. b. Compute diluted EPS. Net Income Available to Weighted Avg. Common Common Stockholders Shares Outstanding Basic EPS $ Diluted EPS $ 1,175,000 ✓ 1,420,000 x 880,000 $ 950,000 * $ Per Share 1.34 ✔ 1.49 x
Transcribed Image Text:Computing EPS: Convertible Preferred with Partial Conversion Bridgeman Company reported the following data for the current year. °Net income, $2,220,000. • Common shares outstanding at the beginning of the year, 800,000. °Nonconvertible cumulative preferred stock, $100 par, $8 dividend per share per year, 100,000 shares outstanding all year. ° Issued 200,000 shares of common stock on October 1. ° Convertible cumulative preferred stock, $100 par, $7 dividend per share per year, 50,000 shares outstanding at the beginning of the year. On March 31, 20,000 shares of preferred stock converted to 40,000 common shares. For both preferred stock issues, assume dividends are paid for the time they are held. a. Compute basic EPS. b. Compute diluted EPS. Net Income Available to Weighted Avg. Common Common Stockholders Shares Outstanding Basic EPS $ Diluted EPS $ 1,175,000 ✓ 1,420,000 x 880,000 $ 950,000 * $ Per Share 1.34 ✔ 1.49 x
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