Question: Computing Basic and Diluted Earnings per Share Nichols Corporation began the year with 4 5 , 0 0 0 shares of common stock and 5

Computing Basic and Diluted Earnings per Share
Nichols Corporation began the year with 45,000 shares of common stock and 5,000 shares of convertible preferred stock outstanding. On May 1, an additional 9,000 shares of common stock were issued. On July 1, the 6,000 shares of common stock were acquired for the treasury. On September 1, the 6,000 treasury shares of common stock were reissued. The preferred stock has a $4 per share dividend rate, and each share may be converted into 2 shares of common stock. Nichols Corporation's net income is $300,000.
Required
a. Compute earnings per share. Round your answer to two decimal places.
$Answer 1
b. Compute diluted earnings per share. Round your answer to two decimal places.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

Computing Basic and Diluted Earnings per Share Nichols Corporation began the year 2015 with 50,000 shares of common stock and 10,000 shares of convertible preferred stock outstanding. On May 1, an...

Q:

Computing Basic and Diluted Earnings per Share Nichols Corporation began the year 2015 with 45,000 shares of common stock and 5,000 shares of convertible preferred stock outstanding. On May 1, an...

Q:

Computing Basic and Diluted Earnings per Share Nichols Corporation began the year 2015 with 40,000 shares of common stock and 10,000 shares of convertible preferred stock outstanding. On May 1, an...

Q:

Computing Basic and Diluted Earnings per Share Nichols Corporation began the year 2015 with 50,000 shares of common stock and 10,000 shares of convertible preferred stock outstanding. On May 1, an...

Q:

Computing Basic and Diluted Earnings per Share Nichols Corporation began the year 2015 with 50,000 shares of common stock and 10,000 shares of convertible preferred stock outstanding. On May 1, an...

Q:

Computing Basic and Diluted Earnings per Share Soliman Corporation began the year with 50,000 shares of common stock and 15,000 shares of convertible preferred stock outstanding. On May 1, an...

Q:

Computing Basic and Diluted Earnings per Share Zeller Corporation began the year with 168,000 shares of common stock and 22,000 shares of convertible preferred stock outstanding. On March 1 an...

Q:

24. Computing Basic and Diluted Earnings per Share Zeller Corporation began 2018 with 120,000 shares of common stock and 16,000 shares of convertible preferred stock outstanding. On March 1 an...

Q:

Thanks! Question 2 Incorrect Mark 0.00 out of 1.00 P Flag question Computing Basic and Diluted Earnings per Share Zeller Corporation began 2015 with 122,000 shares of common stock and 16,000 shares...

Q:

Computing Basic and Diluted Earnings per Share Zeller Corporation began 2018 with 120,000 shares of common stock and 16,000 shares of convertible preferred stock outstanding. On March 1 an additional...

Q:

With explicit reference to the formula for a standard deviation, show how it measures how different respondents are from one another.

Q:

Describe several business situations that would create a need for a report by an independent public accountant concerning the fairness of a company's financial statements.

Q:

It is the same as the opportunity cost of capital It is the NPV associated with a zero discount rate It is the discount rate that makes the NPV of the project equal zero it is the total % return on a...

Q:

Hugo decides to buy his Christmas gifts on Black Friday. To simplify his life, he is giving his 10 closest friends scarves for Christmas and everyone else Christmas cards. Hugo is willing to pay up...