Colson Corp. had $500,000 net income in 20X1. On January 1, 20X1 there were 200,000 ordinary...

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Colson Corp. had $500,000 net income in 20X1. On January 1, 20X1 there were 200,000 ordinary shares outstanding. On April 1, 20,000 shares were issued; and on September 1; Colson Corp. repurchased and retired 30,000 shares. 30,000 outstanding options were granted prior to Jan 1, 20X1 that allows the option holders to buy 30,000 ordinary shares at $40. The market price of the ordinary shares averaged $50 during 20X1. On Jan 1, 20X1, there were 40,000 shares of cumulative preference shares outstanding. The preference is $100 par, pays $3.50 annual dividend for each share. Colson issued $2,000,000 (with 8% of the par value for the interest) convertible bonds at face value in 20X0. Each $1,000 bond is convertible into 30 ordinary shares. The convertible bonds were outstanding at the end of the year of 20X1. The tax rate is 40%. Colson Corp. did not declare dividends for the year 20X1. Required: Compute diluted earnings per share for 20X1. Complete the schedule and show all computations. Colson Corp. had $500,000 net income in 20X1. On January 1, 20X1 there were 200,000 ordinary shares outstanding. On April 1, 20,000 shares were issued; and on September 1; Colson Corp. repurchased and retired 30,000 shares. 30,000 outstanding options were granted prior to Jan 1, 20X1 that allows the option holders to buy 30,000 ordinary shares at $40. The market price of the ordinary shares averaged $50 during 20X1. On Jan 1, 20X1, there were 40,000 shares of cumulative preference shares outstanding. The preference is $100 par, pays $3.50 annual dividend for each share. Colson issued $2,000,000 (with 8% of the par value for the interest) convertible bonds at face value in 20X0. Each $1,000 bond is convertible into 30 ordinary shares. The convertible bonds were outstanding at the end of the year of 20X1. The tax rate is 40%. Colson Corp. did not declare dividends for the year 20X1. Required: Compute diluted earnings per share for 20X1. Complete the schedule and show all computations.

Answer rating: 100% (QA)

Weighted Average Number of Ordinary Shares Outstanding Period Ordinary Shares Outsta... View the full answer