Diluted EPS Problem Background: The Zipper Company


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Aug 18, 2014. Diluted EPS Problem Background: • The Zipper Company reported net income of $1,400,000 in 2013. • In 2012, The Zipper Company issued, at par, 75, $1,000, 8% bonds, each convertible into 100 shares of common stock. • In 2011, The Zipper Company issued 40,000 shares of 6% convertible, cumulative preferred stock, $100 par value. Each share is convertible into 1 share of common stock. • The Zipper Company had outstanding 1,000 options issued during 2012, each exercisable for one share at $8. None has been exercised. The average market price of the stock during 2013 was $20. • The Zipper Company’s tax rate is 40%. Date Event Shares outstanding 1/1/13 Beginning balance 180,000 3/1/13 Issued 60,000 shares 6/1/13 Purchased 78,000 treasury stock 11/1/13 Issued 120,000 shares 11/15/13 Issued 2 for 1 stock split Requirements: Calculate Basic and Dilutive Earnings per Share (please show all calculations) Use the treasury stock method for the options (if necessary). pcd1013
posted a question · Aug 16, 2014 at 12:36am

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