Charles austin – thompson corporation – eps / diluted eps

Charles Austin of the controller’s office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2013. Austin has compiled the information listed below.

1.

 

The company is authorized to issue 8,400,000 shares of $10 par value common stock. As of December 31, 2012, 2,100,000 shares had been issued and were outstanding.

2.

 

The per share market prices of the common stock on selected dates were as follows.

 

   

Price per Share

July 1, 2012

 

$20

January 1, 2013

 

21

April 1, 2013

 

25

July 1, 2013

 

11

August 1, 2013

 

10.5

November 1, 2013

 

9

December 31, 2013

 

10

 

3.

 

A total of 728,400 shares of an authorized 1,353,600 shares of convertible preferred stock had been issued on July 1, 2012. The stock was issued at its par value of $25, and it has a cumulative dividend of $3 per share. The stock is convertible into common stock at the rate of one share of convertible preferred for one share of common. The rate of conversion is to be automatically adjusted for stock splits and stock dividends. Dividends are paid quarterly on September 30, December 31, March 31, and June 30.

4.

 

Thompson Corporation is subject to a 40% income tax rate.

5.

 

The after-tax net income for the year ended December 31, 2013, was $11,640,000.


The following specific activities took place during 2013.

1.

 

January 1—A 5% common stock dividend was issued. The dividend had been declared on December 1, 2012, to all stockholders of record on December 29, 2012.

2.

 

April 1—A total of 391,200 shares of the $3 convertible preferred stock was converted into common stock. The company issued new common stock and retired the preferred stock. This was the only conversion of the preferred stock during 2013.

3.

 

July 1—A 2-for-1 split of the common stock became effective on this date. The board of directors had authorized the split on June 1.

4.

 

August 1—A total of 312,000 shares of common stock were issued to acquire a factory building.

5.

 

November 1—A total of 33,900 shares of common stock were purchased on the open market at $9 per share. These shares were to be held as treasury stock and were still in the treasury as of December 31, 2013.

6.

 

Common stock cash dividends—Cash dividends to common stockholders were declared and paid as follows.

   

        April 15—$0.30 per share

   

        October 15—$0.20 per share

7.

 

Preferred stock cash dividends—Cash dividends to preferred stockholders were declared and paid as scheduled.

 

 

(a) Determine the number of shares used to compute basic earnings per share for the year ended December 31, 2013. (Round answer to 0 decimal places, e.g. 1,500.)

Number of shares to compute basic earnings per share

 

 


(b) Determine the number of shares used to compute diluted earnings per share for the year ended December 31, 2013. 
(Round answer to 0 decimal places, e.g. 1,500.)

Number of shares to compute diluted earnings per share

 

 


(c) Compute the adjusted net income to be used as the numerator in the basic earnings per share calculation for the year ended December 31, 2013.

Adjusted net income

 

$  

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more