70.2K

Verified Solution

Link Copied!

At December 31, Year 4, Lex, Inc. had 600,000 shares of common stock outstanding. On April 1, Year 5, an additional 180,000 shares of common stock were issued for cash. Lex also had $5,000,000 of 8% convertible bonds outstanding at December 31, Year 5, which are convertible into 150,000 shares of common stock. No bonds were issued or converted into common stock during Year 5. What is the number of shares that should be used in computing diluted earnings per share for Year 5? a. 735,000 b. 780,000 c. 885,000 d. 930,000 On December 1, Year 2, Clay Co. declared and issued a 6% stock dividend on its 100,000 shares of outstanding common stock. There was no other common stock activity during Year 2. What number of shares should Clay use in determining basic earnings per share for Year 2? a. 100,000. b. 100,500. c. 103,000. d. 106,000. Mann, Inc., had 300,000 shares of common stock issued and outstanding at December 31, Year 5. On July 1, Year 6, an additional 50,000 shares of common stock were issued for cash. Mann also had unexercised stock options to purchase 40,000 shares of common stock at $15 per share outstanding at the beginning and end of Year 6. The average market price of Mann's common stock was $20 during Year 6. What is the number of shares that should be used in computing diluted earnings per share for the year ended December 31, Year 6? 325,000 b. 335,000. c. 360,000. d. 365,000 a

Answer & Explanation Solved by verified expert

See Answer