Diluted EPS Problem Net income for the Zipper Company in 2013


Question Description:

30

Aug 15, 2014. Diluted EPS Problem Net income for the Zipper Company in 2013 was $1,400,000. Zipper issued in 2012, at par, 75, $1,000, 8% bonds, each convertible into 100 shares of common stock. Zipper issued in 2011, 40,000 shares of 6% convertible, cumulative preferred stock, $100 par value. Each share is convertible into 1 share of common stock. Zipper 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. Zipper’s tax rate is 40%. Date Event Shares outstanding Jan 1, 2013 Beginning balance 180,000 March 1 Issued 60,000 shares June 1 Purchased 78,000 treasury stock Nov 1 Issued 120,000 shares Nov 15 Issued 2 for 1 stock split Required: Calculate Basic and Dilutive Earnings per Share (show all calculations) Use the treasury stock method for the options (if necessary). MASTER1234
posted a question · Aug 15, 2014 at 3:40pm

Answer

30