Compute both basic and diluted earnings per share, Financial Accounting

Compute both basic and diluted earnings per share, Financial Accounting

Assignment Help:

1. Assume that the following data relative to Eddy Company for 2014 is available:

Net Income $1,400,000

Transactions in Common Shares Change Cumulative
Jan. 1, 2014, Beginning number 500,000
Mar. 1, 2014, Purchase of treasury shares (60,000) 440,000
June 1, 2014, Stock split 2-1 440,000 880,000
Nov. 1, 2014, Issuance of shares 120,000 1,000,000

8% Cumulative Convertible Preferred Stock
Sold at par, convertible into 200,000 shares of common;
Outstanding for all of 2014. $1,000,000

Stock Options
Exercisable at the option price of $25 per share. Average
market price in 2014, $30. Outstanding for all of 2014. 60,000 shares

REQUIRED:
Compute both basic and diluted earnings per share.

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