Question

Stanley Department Stores reported net income of $720,000 for the year ended December 31, 2011.

Additional Information:
Common shares outstanding at Jan. 1, 2011 ............ 80,000
Incentive stock options (vested in 2010) outstanding throughout 2011 . 24,000

(Each option is exercisable for one common share at an exercise price of $37.50)
During the year, the market price of Stanley's common stock averaged $45 per share.
On Aug. 30 Stanley sold 15,000 common shares.
Stanley's only debt consisted of $50,000 of 10% short term bank notes.
The company's income tax rate is 40%.

Required:
Compute Stanley's basic and diluted earnings per share for the year ended December 31, 2011.



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  • CreatedJuly 11, 2013
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