On January 1, 2018, Tonge Industries had outstanding 460,000 common shares ($1 par) that originally sold for $25 a share, and 5,000 10% cumulative preferred shares ($100 par), convertible in 50,000 common shares.

On October 1, 2018, Tonge sold and issued an additional 12,000 common shares at $35. As of December 31, 2018, there were 21,000 incentive stock options outstanding, issued in 2017 and exercisable after one year for 21,000 common shares at an exercise price of $32. The market price of the common shares at the end of the year was $50. During the year, the price of common shares averaged $42.

Net income was $600,000. The tax rate for the year was 40%.

Required:
Calculate basic and diluted EPS for the year ended December 31, 2018. (Enter your answers in thousands.)

Answer rating: 100% (QA)

Calculation of Basic EPS Basic EPS Net Income Preferred Dividends Weighted Average Number of Common ... View the full answer