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Katyanochek1 [597]
3 years ago
9

January 1, 2021, Woody Forrest Corporation granted executive stock options to purchase 27,000 of its common shares at $7 each. T

he market price of common stock was $10 per share on December 31, 2021, and averaged $9 per share during the year then ended. There was no change in the 150,000 shares of outstanding common stock during the year. Net income for the year was $25,000. The number of shares to be used in computing diluted earnings per share for the quarter is:
Business
1 answer:
aleksandr82 [10.1K]3 years ago
8 0

Answer:

$156,000

Explanation:

Calculation to determine what The number of shares to be used in computing diluted earnings per share for the quarter is:

First step is to calculate the Net effect

Net effect=$27,000*$7/ $9 = $21,000

Net effect=$27,000k - $21,000

Net effect=$6,000

Now let calculate The number of shares to be used in computing diluted earnings per share for the quarter is

Numbers of shares =150,000 + 6,000

Numbers of shares= 156,000

Diluted EPS= 25,000/ 156,000

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C. The standard of one vote for each share cannot be altered.

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Common share holders are entitled to voting in of new board members and also have the ability to vote for changes in bylaws of the company.

Also common shareholders are shares have different classes with different voting rights.

However it is not true that the standard of one vote for each share cannot be altered.

When more shares are issued by a company it can result in dilution of shares. That means for example if a person has 10,000 shares in a company with 1 million shares, and the company now issues an extra 1 million shares making 2 million in total now.

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Answer:

$21,767.50

Explanation:

<u>Computation table:</u>

<u>Particular                      Amount</u>

Sales                             $50,000

Less: Costs                   $23,000

<u>Less: Depreciation       $2,250</u>

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<u>Less: Interest               $2,000. </u>

<u>EBT                              $22,750</u>

<u>Less: Tax (23%)           $5,232.50 </u>

<u>Net Income              $17,517.50</u>

$24,750 + 2,250 -5,232.50

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