The information below pertains to Sarasota Company for 2021. Net income for the year 6% convertible bonds issued at par ($1.000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2021 Average market price of common stock $8,810,000 4,620,000 2,720,000 8,820.000 40% $17 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 119,000 shares of common stock at $12 per share. (a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. 2.55.)
The information below pertains to Sarasota Company for 2021. Net income for the year 6% convertible bonds issued at par ($1.000 per bond); each bond is convertible into 60 shares of common stock 4% convertible, cumulative preferred stock, $100 par value; each share is convertible into 4 shares of common stock Common stock, $1 par value Tax rate for 2021 Average market price of common stock $8,810,000 4,620,000 2,720,000 8,820.000 40% $17 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 119,000 shares of common stock at $12 per share. (a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. 2.55.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The information below pertains to Sarasota Company for 2021.
Net income for the year
6% convertible bonds issued at par ($1.000 per bond): each bond is convertible into
60 shares of common stock
4% convertible, cumulative preferred stock. $100 par value; each share is convertible
into 4 shares of common stock
Common stock, $1 par value
Tax rate for 2021
Average market price of common stock
$8,810,000
Basic earnings per share $
4,620,000
2,720,000
8,820.000
40%
$17 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 119,000 shares of common stock at
$12 per share.
(a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. 2.55.)
Transcribed Image Text:Common stock. $1 par value
Tax rate for 2021
Average market price of common stock
Basic earnings per share $
2,720,000
8,820,000
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 119,000 shares of common stock at
$12 per share.
(a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. 2.55.)
(b) Compute diluted earnings per share for 2021. (Round answer to 2 decimal places, eg. 2.55.)
Diluted earnings per share $
40%
$17 per share
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