In 2016, its first year of operations, Kanbec Corporation appropriately reported basic earnings per share of $ 1.05 on its income statement. During 2017, the company instituted a share option plan and is required to report both basic and diluted earnings per share of $ 1.12 and $ 0.98, respectively, on its 2017 income statement. In its 2017 annual report, Kanbee presents comparative income statements for 2016 and 2017.
Directions:
Research the related generally accepted accounting principles and prepare a short memo to Kanbee’s president um explains how to report the 2016 and 2017 comparative earnings per share in its 2017 annual report. Cite your reference and applicable paragraph numbers.