An excerpt from the financial records of Windle Inc. (Windle) at December 31, 2019, was as follows: Preferred shares, Series A, $5, cumulative, 60,000 shares issued and outstanding$ 6,000,000Preferred shares, Series B, $6.50, non-cumulative, 40,000 shares issued and outstanding$ 4,000,000Common shares, 1,800,000 shares issued and outstanding$25,400,000 The following common share transactions took place in 2020:April 1: Windle issued 200,000 commonAugust 31: Windle repurchased and cancelled 60,000 commonOctober 31: Windle issued 100,000 common shares. Additional information:Windle’s net income for the year ended December 31, 2020, was $17,600,000.Dividends on preferred shares in arrears and for the current year were declared in full on December 15, 2020 (dividends on preferred shares were in arrears and had last been declared in full on December 15, 2018).Windle is subject to tax at a rate of 30%, and reports underRequired: Calculate Windle’s basic earnings per share for the year ended December 31, Assume that a two-for-one stock split was announced on September 15, 2020. Calculate the weighted average number of common shares for the year ended December 31, 2020

In the given question we are provided with the information of Windle Inc. With the given information…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

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An excerpt from the financial records of Windle Inc. (Windle) at December 31, 2019, was as follows:

Preferred shares, Series A, $5, cumulative, 60,000 shares issued and outstanding	$ 6,000,000
Preferred shares, Series B, $6.50, non-cumulative, 40,000 shares issued and outstanding	$ 4,000,000
Common shares, 1,800,000 shares issued and outstanding	$25,400,000

The following common share transactions took place in 2020:

April 1: Windle issued 200,000 common
August 31: Windle repurchased and cancelled 60,000 common
October 31: Windle issued 100,000 common shares. Additional information:
Windle’s net income for the year ended December 31, 2020, was $17,600,000.
Dividends on preferred shares in arrears and for the current year were declared in full on December 15, 2020 (dividends on preferred shares were in arrears and had last been declared in full on December 15, 2018).
Windle is subject to tax at a rate of 30%, and reports under

Required:

Calculate Windle’s basic earnings per share for the year ended December 31,

Assume that a two-for-one stock split was announced on September 15, 2020. Calculate the weighted average number of common shares for the year ended December 31, 2020

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