On January 1, 2016, Tonge Industries had outstanding 440,000 common shares (par $l) that originally sold for $20 per share, and 4,000 shares of 10% cumulative preferred stock (par $100), convertible into 40,000 common shares. On October 1, 2016, Tonge sold and issued an additional 16,000 shares of common stock at $33. At December 31, 2016, there were incentive stock options outstanding, issued in 2015, and exercisable after one year for 20,000 shares of common stock at an exercise price of $30. The market price of the common stock at year-end was $48. During the year the price of the common shares had averaged $40. Net income was $650,000. The tax rate for the year was 40%. Required: Compute basic and diluted EPS for the year ended December 31, 2016.
On January 1, 2016, Tonge Industries had outstanding 440,000 common shares (par $l) that originally sold for $20
per share, and 4,000 shares of 10% cumulative
On October 1, 2016, Tonge sold and issued an additional 16,000 shares of common stock at $33. At December
31, 2016, there were incentive stock options outstanding, issued in 2015, and exercisable after one year for
20,000 shares of common stock at an exercise price of $30. The market price of the common stock at year-end
was $48. During the year the price of the common shares had averaged $40.
Net income was $650,000. The tax rate for the year was 40%.
Required:
Compute basic and diluted EPS for the year ended December 31, 2016.
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