Treeton Inc. had net income for the fiscal year ended June 30, 2017 of $5 million. There
Question:
Treeton had the following potential common shares outstanding during 2017:
1. Options to buy 100,000 common shares at $45 per share.
2. 100,000 convertible preferred shares entitled to a cumulative dividend of $10 per share. Each preferred share is convertible into 1.5 common shares.
3. 4% convertible bonds with a principal amount of $30 million, issued at par. Each $1,000 bond is convertible into 25 common shares.
Instructions
For the fiscal year ended June 30, 2017, calculate the following for Treeton Inc. For simplicity, ignore the requirement to record the debt and equity components separately.
(a) Basic earnings per share
(b) Diluted earnings per share
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Step by Step Answer:
The calculations of Treeton Incs basic and diluted earnings per share for the 2017fiscal year are shown below a Basic Earnings Per Share Income Shares ...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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