Keyser Stamping began the current year with 490,000 common shares outstanding and issued an additional 210,000 shares on September 1. The firm has $11,800,000, 1.5% convertible bonds outstanding for a full year (i.e., $177,000 coupon interest per year), which are convertible into 334,000 shares of common stock. The firm issued the bonds at par and did not convert any during the current year. It also had $1,180,000 par value, 5% nonconvertible, noncumulative preferred stock outstanding for the full year and declared dividends for the current year. The company is subject to a 30% tax rate and net income is $3,600,000. Requirement Based on this information, compute basic and diluted earnings per share for the current year. Compute the basic earnings per share for the current year. (Round the earnings per share (EPS) to the nearest cent, X.XX.) Basic EPS =

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Keyser Stamping began the current year with 490,000 common
shares outstanding and issued an additional 210,000 shares on
September 1. The firm has $11,800,000, 1.5% convertible bonds
outstanding for a full year (i.e., $177,000 coupon interest
per year), which are convertible into 334,000 shares of common
stock. The firm issued the bonds at par and did not convert any
during the current year. It also had $1,180,000 par value, 5%
nonconvertible, noncumulative preferred stock outstanding for the
full year and declared dividends for the current year. The company
is subject to a 30% tax rate and net income is $3,600,000.
Requirement
Based on this information, compute basic and diluted earnings per
share for the current year.
Compute the basic earnings per share for the current year. (Round
the earnings per share (EPS) to the nearest cent, X.XX.)
Basic EPS =
Transcribed Image Text:Keyser Stamping began the current year with 490,000 common shares outstanding and issued an additional 210,000 shares on September 1. The firm has $11,800,000, 1.5% convertible bonds outstanding for a full year (i.e., $177,000 coupon interest per year), which are convertible into 334,000 shares of common stock. The firm issued the bonds at par and did not convert any during the current year. It also had $1,180,000 par value, 5% nonconvertible, noncumulative preferred stock outstanding for the full year and declared dividends for the current year. The company is subject to a 30% tax rate and net income is $3,600,000. Requirement Based on this information, compute basic and diluted earnings per share for the current year. Compute the basic earnings per share for the current year. (Round the earnings per share (EPS) to the nearest cent, X.XX.) Basic EPS =
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