The information below pertains to Coronado Company for 2021. Net income for the year 6% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2021 Average market price of common stock $1,140,000 2,010,000 3,820,000 5,820,000 20% $25 per share There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 77,900 shares of common stock at $20 per share.
The information below pertains to Coronado Company for 2021. Net income for the year 6% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 6% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock Common stock, $10 par value Tax rate for 2021 Average market price of common stock $1,140,000 2,010,000 3,820,000 5,820,000 20% $25 per share There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 77,900 shares of common stock at $20 per share.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The information below pertains to Coronado Company for 2021.
Net income for the year
6% convertible bonds issued at par ($1,000 per bond); each bond is convertible into
30 shares of common stock
6% convertible, cumulative preferred stock, $100 par value; each share is convertible
into 3 shares of common stock
Common stock, $10 par value
Tax rate for 2021
Average market price of common stock
Diluted earnings per share
1.56
$1,140,000
There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds
outstanding. There is no treasury stock. The company also has common stock options (granted in a prior
year) to purchase 77,900 shares of common stock at $20 per share.
(a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.)
Basic earnings per share
(b) Compute diluted earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.)
1.56
2,010,000
3,820,000
5,820,000
20%
$25 per share
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