Assume that the following data relative to Gaga Company for 2019 is available: Net Income Common shares issued and outstanding Tax rate 8% Cumulative Convertible, $100 par value Preferred Shares Convertible into 200,000 common shares 12% Convertible Bonds ($100 bond each convertible into 15 common shares) Call Options Exercisable at the option price of $25 per share. Average market price in 2019, $30 Warrants Exercisable at option price of $32/ share Average market price in 2019, $30 Instructions (a) Calculate the basic earnings per share for 2019. (Round to two decimal places) (b) Calculate the diluted earnings per share for 2019. (Round to two decimal places) $2,400,000 2,000,000 27% $1,000,000 $95,000 60,000 shares 22,000 shares
Assume that the following data relative to Gaga Company for 2019 is available: Net Income Common shares issued and outstanding Tax rate 8% Cumulative Convertible, $100 par value Preferred Shares Convertible into 200,000 common shares 12% Convertible Bonds ($100 bond each convertible into 15 common shares) Call Options Exercisable at the option price of $25 per share. Average market price in 2019, $30 Warrants Exercisable at option price of $32/ share Average market price in 2019, $30 Instructions (a) Calculate the basic earnings per share for 2019. (Round to two decimal places) (b) Calculate the diluted earnings per share for 2019. (Round to two decimal places) $2,400,000 2,000,000 27% $1,000,000 $95,000 60,000 shares 22,000 shares
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
N3.
Account
Transcribed Image Text:Assume that the following data relative to Gaga Company for 2019 is available:
Net Income
Common shares issued and outstanding
Tax rate
8% Cumulative Convertible, $100 par value Preferred Shares
Convertible into 200,000 common shares
12% Convertible Bonds
($100 bond each convertible into 15 common shares)
Call Options
Exercisable at the option price of $25 per share.
Average market price in 2019, $30
Warrants
Exercisable at option price of $32/ share
Average market price in 2019, $30
Instructions
(a) Calculate the basic earnings per share for 2019. (Round to two decimal places)
(b) Calculate the diluted earnings per share for 2019. (Round to two decimal places)
$2,400,000
2,000,000
27%
$1,000,000
$95,000
60,000 shares
22,000 shares
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