Homework Help is Here – Start Your Trial Now!
Business
Accounting
Witter House is a calendar-year firm with 430 million common shares outstanding throughout 2021 and 2022. As part of its executive compensation plan, at January 1, 2020, the company had issued 60 million executive stock options permitting executives to buy 60 million shares of stock for $12 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $2 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $16 per share on the grant date. The average price of the common shares was $16 and $20 during 2021 and 2022, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $280 million and $290 million in 2021 and 2022, respectively. Required: 1. Compute basic and diluted earnings per share for Witter House in 2021. 2. Compute basic and diluted earnings per share for Witter House in 2022. (For all requirements, do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 10,000,000 should be entered as 10). Round "Earnings per share" answers to 2 decimal places.) Numerator 1. Basic $ 280 Diluted $ 280 2. Basic Diluted 6969 Answer is not complete. Denominator 430 = 466.00 = 290 430 = 290 450.00 = Earnings per share 0.65 6969 0.67 1.00

Witter House is a calendar-year firm with 430 million common shares outstanding throughout 2021 and 2022. As part of its executive compensation plan, at January 1, 2020, the company had issued 60 million executive stock options permitting executives to buy 60 million shares of stock for $12 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $2 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $16 per share on the grant date. The average price of the common shares was $16 and $20 during 2021 and 2022, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $280 million and $290 million in 2021 and 2022, respectively. Required: 1. Compute basic and diluted earnings per share for Witter House in 2021. 2. Compute basic and diluted earnings per share for Witter House in 2022. (For all requirements, do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 10,000,000 should be entered as 10). Round "Earnings per share" answers to 2 decimal places.) Numerator 1. Basic $ 280 Diluted $ 280 2. Basic Diluted 6969 Answer is not complete. Denominator 430 = 466.00 = 290 430 = 290 450.00 = Earnings per share 0.65 6969 0.67 1.00

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Witter House is a calendar-year firm with 430 million common shares outstanding throughout 2021 and 2022. As part of its executive compensation plan, at January 1, 2020, the company had issued 60 million executive stock options permitting executives to buy 60 million shares of stock for $12 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $2 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $16 per share on the grant date. The average price of the common shares was $16 and $20 during 2021 and 2022, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $280 million and $290 million in 2021 and 2022, respectively. Required: 1. Compute basic and diluted earnings per share for Witter House in 2021. 2. Compute basic and diluted earnings per share for Witter House in 2022. (For all requirements, do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 10,000,000 should be entered as 10). Round "Earnings per share" answers to 2 decimal places.) Numerator 1. Basic $ 280 Diluted $ 280 2. Basic Diluted 6969 Answer is not complete. Denominator 430 = 466.00 = 290 430 = 290 450.00 = Earnings per share 0.65 6969 0.67 1.00
Transcribed Image Text:Witter House is a calendar-year firm with 430 million common shares outstanding throughout 2021 and 2022. As part of its executive compensation plan, at January 1, 2020, the company had issued 60 million executive stock options permitting executives to buy 60 million shares of stock for $12 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $2 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $16 per share on the grant date. The average price of the common shares was $16 and $20 during 2021 and 2022, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $280 million and $290 million in 2021 and 2022, respectively. Required: 1. Compute basic and diluted earnings per share for Witter House in 2021. 2. Compute basic and diluted earnings per share for Witter House in 2022. (For all requirements, do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places (i.e., 10,000,000 should be entered as 10). Round "Earnings per share" answers to 2 decimal places.) Numerator 1. Basic $ 280 Diluted $ 280 2. Basic Diluted 6969 Answer is not complete. Denominator 430 = 466.00 = 290 430 = 290 450.00 = Earnings per share 0.65 6969 0.67 1.00
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Presentation of Financial Statements
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
  • SEE MORE 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
SEE MORE TEXTBOOKS