Stanley Department Stores reported net income of $1,010,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding at Jan. 1, 2021 155,000 Incentive stock options (vested in 2020) outstanding throughout 2021 36,000 (Each option is exercisable for one common share at an exercise price of $29.50) During the year, the market price of Stanley’s common stock averaged $35.40 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley’s only debt consisted of $49,000 of 10% short-term bank notes. The company’s income tax rate is 25%. Required: Compute Stanley’s basic and diluted earnings per share for the year ended December 31, 2021
Stanley Department Stores reported net income of $1,010,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding at Jan. 1, 2021 155,000 Incentive stock options (vested in 2020) outstanding throughout 2021 36,000 (Each option is exercisable for one common share at an exercise price of $29.50) During the year, the market price of Stanley’s common stock averaged $35.40 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley’s only debt consisted of $49,000 of 10% short-term bank notes. The company’s income tax rate is 25%. Required: Compute Stanley’s basic and diluted earnings per share for the year ended December 31, 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Stanley Department Stores reported net income of $1,010,000 for the year ended December 31, 2021.
Additional Information:
| Common shares outstanding at Jan. 1, 2021 | 155,000 |
| Incentive stock options (vested in 2020) outstanding throughout 2021 | 36,000 |
| (Each option is exercisable for one common share at an exercise price of $29.50) | |
| During the year, the market price of Stanley’s common stock averaged $35.40 per share. | |
| On Aug. 30, Stanley sold 15,000 common shares. | |
| Stanley’s only debt consisted of $49,000 of 10% short-term bank notes. | |
| The company’s income tax rate is 25%. | |
Required:
Compute Stanley’s basic and diluted earnings per share for the year ended December 31, 2021
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