1. Rand, Inc., had 20,000 shares of common stock outstanding at January 1, Year 2. On May 1, Year 2, it issued 10,500 shares of common stock. Outstanding all year were 10,000 shares of nonconvertible preferred stock on which a dividend of $4 per share was paid in December Year 2. Net income for Year 2 was $96,700. Rand's basic earnings per share for Year 2 are a $1.86 b. $2.10 c. $2.84 d. $3.58 4. The following information pertains to Jet Corp's outstanding stock for Year 3: Common stock, $5 par value Shares outstanding, 1/1/YR3 20,000 2-for-1 stock split, 4/1/YR3 20,000 Shares issued, 7/1/YR3 10.000 Preferred stock, $10 par value, 5% cumulative Shares outstanding, 1/1/YR3 4,000 What are the number of shares Jet should use to calculate Year 3 basic earnings per share? 40,000 b. 45,000 50,000 d. 54.000 a C. 2. At December 31, Year 3 and Year 2, Gow Corp. had 100,000 shares of common stock and 10,000 shares of 5%, $100 par value cumulative preferred stock outstanding. No dividends were declared on either the preferred or common stock in Year 3 or Year 2. Net income for Year 3 was $1,000,000. For Year 3, basic earnings per common share amounted to a. $10.00 b. $9.50 c. $9.00 d. $5.00 5. On January 31, Year 3, Pack, Inc., split its common stock 2 for 1, and Young, Inc., issued a 5% stock dividend. Both companies issued their December 31, Year 2, financial statements on March 1, Year 3. Should Pack's Year 2 basic earnings per share (EPS) take into consideration the stock split, and should Young's Year 2 EPS take into consideration the stock dividend? Pack's Young's Year 2 EPS Year 2 EPS a. Yes No b. No No c. Yes Yes d No Yes 3. Fay Corporation's capital structure at December 31, Year 3, was as follows: Shares issued and outstanding Common stock 200,000 Nonconvertible preferred stock 50,000 6. During Year 4, Moore Corp. had the following two classes of stock issued and outstanding for the entire year. On October 1, Year 4, Fay issued a 10% stock dividend on its common stock, and paid $100,000 cash dividends on the preferred stock. Net income for the year ended December 31, Year 4, was $960,000. Fay's Year 4 basic earnings per common share should be a. $3.91 b. $4.10. c. $4.36. d. $4.68 100,000 shares of common stock, $1 par. 1,000 shares of 4% preferred stock, $100 par, convertible share for share into common stock. Moore's Year 4 net income was $900,000, and its income tax rate for the year was 30%. In the computation of diluted earnings per share for Year 4, the amount to be used in the numerator is a. $896,000 b. $898,800 c. $900,000 d. $901,200