Compute basic earnings per share for 2021Compute the diluted earnings per share for 2021 Assume that the following data relative to Blossom Company for 2021 is available:Net Income$2,800,000Transactions in Common SharesChangeCumulativeJan. 1, 2021, Beginning number720,000Mar. 1, 2021, Purchase of treasury shares(53,400)666,600June 1, 2021, Stock split 2-1666,6001,333,200Nov. 1, 2021, Issuance of shares228,0001,561,2006% Cumulative Convertible Preferred StockSold at par, convertible into 180,000 shares ofcommon (adjusted for split).$900,000Stock Options93,000 sharesExercisable at the option price of $25 per share. Averagemarket price in 2021, $30 (market price and option priceadjusted for split).

Calculation of basic and diluted earnings per share are as follows

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Compute basic earnings per share for 2021 Compute the diluted earnings per share for 2021

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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Question

Compute basic earnings per share for 2021

Compute the diluted earnings per share for 2021

Assume that the following data relative to Blossom Company for 2021 is available:
Net Income
$2,800,000
Transactions in Common Shares
Change
Cumulative
Jan. 1, 2021, Beginning number
720,000
Mar. 1, 2021, Purchase of treasury shares
(53,400)
666,600
June 1, 2021, Stock split 2-1
666,600
1,333,200
Nov. 1, 2021, Issuance of shares
228,000
1,561,200
6% Cumulative Convertible Preferred Stock
Sold at par, convertible into 180,000 shares of
common (adjusted for split).
$900,000
Stock Options
93,000 shares
Exercisable at the option price of $25 per share. Average
market price in 2021, $30 (market price and option price
adjusted for split).

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