Q. Colson Corp. had $800,000 net income in 2018. On January 1, 2018 there were 200,000 shares of common stock outstanding. On April 1, 20,000 shares were issued and on September 1, Colson bought 30,000 shares of treasury stock. There are 30,000 options to buy common stock at $40 a share outstanding. The market price of the common stock averaged $50 during 2018. The tax rate is 40%.   During 2018, there were 40,000 shares of convertible preferred stock outstanding. The preferred is $100 par, pays $3.50 a year dividend, and is convertible into three shares of common stock.   Colson issued $2,000,000 of 8% convertible bonds at face value during 2017. Each $1,000 bond is convertible into 30 shares of common stock.   Instructions:   Compute diluted earnings per share for 2018. Complete the schedule and show all computations.   Security Net Income Adjustment Adjusted Net income Shares Adjustment Adjustment Shares EPS

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Q. Colson Corp. had $800,000 net income in 2018. On January 1, 2018 there were 200,000

shares of common stock outstanding. On April 1, 20,000 shares were issued and on September

1, Colson bought 30,000 shares of treasury stock. There are 30,000 options to buy common

stock at $40 a share outstanding. The market price of the common stock averaged $50 during

2018. The tax rate is 40%.

 

During 2018, there were 40,000 shares of convertible preferred stock outstanding. The

preferred is $100 par, pays $3.50 a year dividend, and is convertible into three shares of

common stock.

 

Colson issued $2,000,000 of 8% convertible bonds at face value during 2017. Each $1,000

bond is convertible into 30 shares of common stock.

 

Instructions:

 

Compute diluted earnings per share for 2018. Complete the schedule and show all

computations.

 

Security Net Income Adjustment Adjusted Net income Shares Adjustment Adjustment Shares EPS

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Consolidations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education