The company has 150,000 preferred shares issued and outstanding for the entire year. The preferred shares are
Question:
The company has 150,000 preferred shares issued and outstanding for the entire year. The preferred shares are non-cumulative and non-participating. There is a conversion feature where each preferred share can be converted into 50 common shares.
On January 1, 2020; the company had 500,000 common shares outstanding. On April 1, the company issued 100,000 common shares. There was a 2 for 1 stock split on June 1. These transactions have been accounted for and are included on the trial balance (dollar value of common shares). These items are needed to calculate weighted average common shares – to calculate basic and diluted EPS.
The company can issue an unlimited number of common shares.
In the Excel spreadsheet, use the tab “Diluted EPS Calculation” to show your work relating to, weighted average number or shares and Earnings per Share and to make any dividend calculations. Post appropriate journal entries.
Only calculate EPS and Diluted EPS for 2020.
There was no change in shares during 2019.
Trial Balance 2019 & 2020
Preferred Shares | 500,000 | 500,000 | ||
Common Stock | 1,000,000 | 1,500,000 | ||
Common Stock Subscribed | 100,000 | |||
Retained Earnings | 337,366 | 692,275 |
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones