On January 1, 2021, Gibson Industries had outstanding 440,000 common stock shares ($1 par) that originally sold for $20 per share and 5,000 shares of 10% cumulative preferred stock ($100 par), convertible into 50,000 common stock shares.
On January 1, 2021, Gibson Industries had outstanding 440,000 common stock shares ($1 par) that
originally sold for $20 per share and 5,000 shares of 10% cumulative
($100 par), convertible into 50,000 common stock shares.
On October 1, 2021, Gibson issued and sold an additional 16,000 shares of common stoct at $41.
At December 31, 2021, there were 25,000 incentive stock options outstanding, issued in 2020, and
exercisable after one year for 25,000 common stock shares at an exercise price of $30.
The market price at year-end 2021 was $48 per share. During the year the average common stock
price was $40 per share.
Net income was $650,000 for 2021. The income tax rate was 25% for 2021.
REQUIRED: 1) Compute basic earnings per share for 2021.
2) Compute diluted earnings per share for 2021.
3) Identify the Order of Inclusion for dilutive securities.
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