Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on december 31, 2015, berclair inc. had 442 millio

On December 31, 2015, Berclair Inc. had 442 million shares of common stock and 5 million...

Free

60.1K

Verified Solution

Question

Accounting

On December 31, 2015, Berclair Inc. had 442 million shares ofcommon stock and 5 million shares of 9%, $100 par value cumulativepreferred stock issued and outstanding. Net income for the yearended December 31, 2016, was $1,050 million.

Also outstanding at December 31 were incentive stock optionsgranted to executives. The options were exercisable for 30 millioncommon shares at an exercise price of $56 per share. During 2016,the market price of the common shares averaged $70 per share.

Required: Compute Berclair's basic anddiluted earnings per share for the year endedDecember 31, 2016.

Answer & Explanation Solved by verified expert
3.9 Ratings (616 Votes)

Particulars $
Net income $       1,050,000,000
Less Dividend (5 million X 100 X 9%) $          (45,000,000)
Net income attributable to common stockholders $       1,005,000,000
Weighted average number of common stock outstanding              442,000,000
Basic EPS $                        2.27
Particulars
Numerator for Diluted EPS
Net income attributable to common stockholders $       1,005,000,000
Numerator for Diluted EPS $       1,005,000,000
Denominator for Diluted EPS         442,000,000.00
Add Stock options exercised           30,000,000.00
Less Buy back of shares from the proceeds of options
(30,000,000 X $56/$70)		         (24,000,000.00)
Denominator for Diluted EPS         448,000,000.00
Diluted EPS $                        2.24

For any clarification, please comment. Kindly Up Vote!
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Advance Math
1.2K views

For the following, A = attractiveness and B=time; same levels. Conduct a two-factor fixed effects ANOVA...

Biology
1.2K views

ease select the patterns of direct contact transmission of infectious dis Check All That Apply...

Biology
1.2K views

V With its source Antidiuretic Hormone ADH Luteinizing Hormone LH Prolactin T3 T4 Calcitonin Cortisol...

Physics
1.2K views

A conducting rod pq is sliding on two parallel conducting rods with constant velocity in...

Basic Math
1.2K views

Use the algebraic tests to check for symmetry with respect to both axes and the...

Calculus
1.2K views

Given the graph of function f below which is greater N 3 off ar da...

Calculus
1.2K views

TV 4 1 sin5 x dx 0 At first I divided sin5 x dx to...

Accounting
1.2K views

Martin Company purchases a machine at the beginning of the year at a cost of...

Accounting
1.2K views

The Harris Company is authorized to issue 1,000,000 shares of $5 par value common stock....

Accounting
1.2K views

Which one of the following costs should NOT be considered a direct cost of serving...

Accounting
1.2K views

10.When purchases of merchandise are made on account with a perpetual inventory system, the transaction...

Accounting
1.2K views

What is the companys cument fabo? Minu Onowe o.anso ! 0.94 to 1 059101 133...