ABC Company had 2,000,000 shares of common stock issued and outstanding at December 31, 2020. On July 1, 2021 an additional 1,200,000 shares were issued for cash. ABC also had stock options outstanding at the beginning and end of 2021 which allow the holders to purchase 350,000 shares of common stock at $20 per share. The average market price of ABC’s common stock was $22 during 2021. What is the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2021?
ABC Company had 2,000,000 shares of common stock issued and outstanding at December 31, 2020. On July 1, 2021 an additional 1,200,000 shares were issued for cash. ABC also had stock options outstanding at the beginning and end of 2021 which allow the holders to purchase 350,000 shares of common stock at $20 per share. The average market price of ABC’s common stock was $22 during 2021. What is the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2021?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 10MC
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27) ABC Company had 2,000,000 shares of common stock issued and outstanding at December 31, 2020. On July 1, 2021 an additional 1,200,000 shares were issued for cash. ABC also had stock options outstanding at the beginning and end of 2021 which allow the holders to purchase 350,000 shares of common stock at $20 per share. The average market price of ABC’s common stock was $22 during 2021. What is the number of shares that should be used in computing diluted earnings per share for the year ended December 31, 2021?
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