On December 31, 2021, AVS Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $100 par, cumulative (non-convertible) preferred stock outstanding. On February 28, 2022, AVS purchased 24,000 shares of common stock on the open market as treasury stock paying $45 per share. AVS sold 6,000 of the treasury shares on September 30, 2022, for $47 per share.  Net income for 2022 was $540,000 and the income tax rate is 40%.   Five thousand 6% bonds were issued at par on January 1, 2022. Each $1,000 bond is convertible into 125 shares of common stock. None of the bonds had been converted by December 31, 2022. 1) Compute basic earnings per share (rounded to 2 decimal places) for AVS Company for 2022.  Show your computations.   2) Compute diluted earnings per share (rounded to 2 decimal places) for AVS Company for 2022.  Show your computations

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Chapter1: Financial Statements And Business Decisions
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4. On December 31, 2021, AVS Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $100 par, cumulative (non-convertible) preferred stock outstanding. On February 28, 2022, AVS purchased 24,000 shares of common stock on the open market as treasury stock paying $45 per share. AVS sold 6,000 of the treasury shares on September 30, 2022, for $47 per share.  Net income for 2022 was $540,000 and the income tax rate is 40%.

 

Five thousand 6% bonds were issued at par on January 1, 2022. Each $1,000 bond is convertible into 125 shares of common stock. None of the bonds had been converted by December 31, 2022.

1) Compute basic earnings per share (rounded to 2 decimal places) for AVS Company for 2022 Show your computations.

 

2) Compute diluted earnings per share (rounded to 2 decimal places) for AVS Company for 2022.  Show your computations

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