Question: Rio Inc. had 423,500 shares of common stock outstanding throughout the year. Net income for the year was $1,218,000. Rio Inc. had 3 potentially dilutive

Rio Inc. had 423,500 shares of common stock outstanding throughout the year. Net income for the year was $1,218,000. Rio Inc. had 3 potentially dilutive securities.

Potentially
Dilutive Security		Numerator
Effect		Denominator
Effect
1$61,60018,150 shares
215,40030,800 shares
306,600 shares


 

a. Compute basic earnings per share.

b. Compute diluted earnings per share.

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