Anderson Steel Company began 2011 with 600,000 shares of common stock outstanding. On March 31, 2011, 100,000

Question:

Anderson Steel Company began 2011 with 600,000 shares of common stock outstanding. On March 31, 2011, 100,000 new shares were sold at a price of $45 per share. The market price has risen steadily since that time to a high of $50 per share at December 31. No other changes in shares occurred during 2011, and no securities are outstanding that can become common stock. However, there are two agreements with officers of the company for future issuance of common stock. Both agreements relate to compensation arrangements reached in 2010. The first agreement grants to the company president a right to 10,000 shares of stock each year the closing market price is at least $48. The agreement begins in 2012 and expires in 2015. The second agreement grants to the controller a right to 15,000 shares of stock if she is still with the firm at the end of 2019. Net income for 2011 was $2,000,000.


Required:

Compute Anderson Steel Company's basic and diluted EPS for the year ended December 31, 2011.


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...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

Question Posted: