Exercise 19-19 (Static) EPS; stock dividend; nonconvertible preferred stock; treasury shares;shares sold; stock options; convertible bonds [LO19-5, 19-6, 19-7, 19-8, 19-9]On December 31, 2020, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par valuecumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 24 million shares of its commonstock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold onOctober 1. Net income for the year ended December 31, 2021, was $150 million. The income tax rate is 25%.Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2016. The optionsare exercisable as of September 13, 2020, for 30 million common shares at an exercise price of $56 per share. During 2021,the market price of the common shares averaged $70 per share.In 2017, $50 million of 8% bonds, convertible into 6 million common shares, were issued at face value.Required:Compute Berclair's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers inmillions (i.e., 10,000,000 should be entered as 10). Do not round intermediate calculations.)Answer is complete but not entirely correct.NumeratorDenominatorEarnings per ShareBasic123 O/203 X =240.61Diluted2$124 X/204 X0.61

Earnings per share represents the net earnings of the company held in hands of each shareholder.

On December 31, 2020, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $150 million. The income tax rate is 25%. 12 2016

On December 31, 2020, Berclair Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2021, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2021. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2021, was $150 million. The income tax rate is 25%. 12 2016

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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