Copley Corporation is preparing their financial statements for the year ending February 28, 2022. Copley Corporation has two categories of stock: Preferred and Common. The preferred stock is structured such that the holders of the preferred stock may convert one share of preferred stocks into one share of common stock if the market price of the common stock is greater than $1,000. As of February 28, 2022, the market price of the common stock had never reached $1,000. In the preparation of the 2/28/22 Income Statement Copley’s staff accountant was calculating the Basic and Diluted EPS. While calculating the diluted EPS the staff accountant is unsure of whether to include the potential impact of the convertible preferred stock since the trigger conversion price had not been met as of 2/28/22. Based upon your response above calculate Basic & Diluted EPS using the following information: (round all calculations to the second decimal place… do not use dollar signs in your answer) Net Income: $25,000,000 Weighted Average number of Common Shares Outstanding 2,500,000 Preferred Stock: 10,000 shares issued & outstanding, $10% $200 Par Value, Convertible 1:5 to Common Stock if $1,000 market price of common stock achieved. Basic EPS ___________ Diluted EPS _______ __
Copley Corporation is preparing their financial statements for the year ending February 28, 2022. Copley Corporation has two categories of stock: Preferred and Common. The preferred stock is structured such that the holders of the preferred stock may convert one share of preferred stocks into one share of common stock if the market price of the common stock is greater than $1,000. As of February 28, 2022, the market price of the common stock had never reached $1,000. In the preparation of the 2/28/22 Income Statement Copley’s staff accountant was calculating the Basic and Diluted EPS. While calculating the diluted EPS the staff accountant is unsure of whether to include the potential impact of the convertible preferred stock since the trigger conversion price had not been met as of 2/28/22.
Based upon your response above calculate Basic & Diluted EPS using the following information: (round all calculations to the second decimal place… do not use dollar signs in your answer)
Net Income: $25,000,000
Weighted Average number of Common Shares Outstanding 2,500,000
Preferred Stock:
10,000 shares issued & outstanding, $10% $200 Par Value,
Convertible 1:5 to Common Stock if $1,000 market price
of common stock achieved.
Basic EPS ___________
Diluted EPS _______ __
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