Major Corporation had 40,000 shares of common stock outstanding during 2019 with the following characteristics: Par value per share$10 Average market value per share$50 Market value per share on 12/31/2016 $ 60 The company also has compensatory share options to purchase 5,000 shares of common stock at $40 a share duringthe year. The unrecognized compensation cost (net of tax) related to these share options is $5 per share.Net income for the year was $75,000. Required: Compute the basic and diluted earnings per share for Major Corporation.

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Answered: Major Corporation had 40,000 shares of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Major Corporation had 40,000 shares of common stock outstanding during 2019 with the following characteristics:

Par value per share	$10
Average market value per share	$50
Market value per share on 12/31/2016	$ 60

The company also has compensatory share options to purchase 5,000 shares of common stock at $40 a share during
the year. The unrecognized compensation cost (net of tax) related to these share options is $5 per share.
Net income for the year was $75,000.

Required:
Compute the basic and diluted earnings per share for Major Corporation.

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