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On December 31, 2023, Berclair Incorporated had 340 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2024. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2024, was $400 million. The income tax rate is 25%. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2019. The options are exercisable as of September 13, 2023, for 30 million common shares at an exercise price of $56 per share. During 2024, the market price of the common shares averaged $70 per share. In 2020, $50.0 million of 8% bonds, convertible into 6 million common shares, were issued at face value. Required: Compute Berclair’s basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible securities have been adjusted for any stock split or stock dividend.)

On December 31, 2023, Berclair Incorporated had 340 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2024. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2024, was $400 million. The income tax rate is 25%. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2019. The options are exercisable as of September 13, 2023, for 30 million common shares at an exercise price of $56 per share. During 2024, the market price of the common shares averaged $70 per share. In 2020, $50.0 million of 8% bonds, convertible into 6 million common shares, were issued at face value. Required: Compute Berclair’s basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible securities have been adjusted for any stock split or stock dividend.)

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 23MC: The correct formula for the calculation of earnings per share is ________. A. B. C. D.
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On December 31, 2023, Berclair Incorporated had 340 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding.

  • On March 1, 2024, Berclair purchased 24 million shares of its common stock as treasury stock.
  • Berclair issued a 5% common stock dividend on July 1, 2024.
  • Four million treasury shares were sold on October 1.
  • Net income for the year ended December 31, 2024, was $400 million.
  • The income tax rate is 25%.
  • Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2019.
  • The options are exercisable as of September 13, 2023, for 30 million common shares at an exercise price of $56 per share.
  • During 2024, the market price of the common shares averaged $70 per share.
  • In 2020, $50.0 million of 8% bonds, convertible into 6 million common shares, were issued at face value.

Required:

Compute Berclair’s basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible securities have been adjusted for any stock split or stock dividend.)

 

 

 

Basic Diluted Numerator + + Denominator = = = Earnings per Share
Transcribed Image Text:Basic Diluted Numerator + + Denominator = = = Earnings per Share
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The computation of the Weighted average number of shares is not 321. And, the computation of diluted outstanding shares is not 351.

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