Fountain Inc. has 5,000,000 shares of common stock outstanding on January 1, 2017. It issued an additional

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Fountain Inc. has 5,000,000 shares of common stock outstanding on January 1, 2017. It issued an additional 1,000,000 shares of common stock on April 1, 2017, and 500,000 more on July 1, 2017. On October 1, 2017, Fountain issued 10,000 convertible bonds; each one had a $1,000 face value and paid 7% interest. Each bond is convertible into 40 shares of common stock. No bonds were converted during 2017.
Required:
What number of shares should be used in computing basic EPS and diluted EPS, respectively?
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...
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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Financial Reporting and Analysis

ISBN: 978-1259722653

7th edition

Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer

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