Palo Alto Company earned net income of $43,800 during 2013. At the beginning of 2013, it had

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Palo Alto Company earned net income of $43,800 during 2013. At the beginning of 2013, it had 10,000 shares of common stock outstanding; an additional 4,000 shares were issued on July 2. During 2013, 600 shares of 8%, $100 par, convertible preferred stock were outstanding the entire year. Dividends on this preferred stock were paid in 2013. Each share is convertible into 5 shares of common stock. The corporate income tax rate is 30%.

Required:

Compute the 2013 diluted earnings per share.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Related Book For  book-img-for-question

Intermediate Accounting Reporting and Analysis

ISBN: 978-1111822361

1st edition

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

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