Basic and diluted earnings per share

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On December 31, 2005, Brisbane Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2006, Brisbane purchased 24,000 shares of common stock on the open market as treasury stock paying $40 per share. Brisbane sold 6,000 treasury shares on September 30, 2006, for $45 per share. Net income for 2006 was $180,905. Also outstanding during the year were stock options giving key personnel the option to buy 50,000 common shares at $40. During 2006, the average market price of the common shares was $50 with a closing price of $51 on December 31, 2006.

Required: Compute Brisbane's basic and diluted earnings per share for 2006.

Reference no: EM13128521

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