Question 1

Greenwell Coffee Company began operations on the first day of the year. On that day they issued 100,000 shares. On March 1 they issued 23,000 shares and on July 1, another 30,000 shares. On December 1, Greenwell repurchased 6,000 shares of outstanding shares. Compute the weighted-average shares of stock for the first year of operation. (Round your final answer to the nearest whole number.)

Accepted Answer

A)   147,000
B)   134,667
C)   133,667
D)   134,167E) C) and D)
F) A) and B)

Question 2

Austin Products reported $400,000 net income for the year with 100,000 common shares outstanding all year. Austin also had 60,000 shares of $100, 8% convertible preferred shares outstanding all year. Each preferred share is convertible into 10 shares of common stock. Determine the numerator for both basic and diluted EPS.

Accepted Answer

A)   basic EPS $400,000 - (60,000 × $100 × 8%) ; diluted EPS $400,000 - (60,000 × $100 × 8%) 
B)   basic EPS $400,000 - (60,000 × $100 × 8%) ; diluted EPS $400,000
C)   basic EPS $400,000 - (60,000 × $100 × 8%) ; diluted EPS $400,000 + (60,000 × $100 × 8%) 
D)   basic EPS $400,000; diluted EPS $400,000E) A) and D)
F) B) and C)

Exam 20: Earnings Per Share

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Exam 20: Earnings Per Share

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