On January 1, 2018, Tonge Industries had outstanding 700,000 common shares ($1 p
ID: 2398365 • Letter: O
Question
On January 1, 2018, Tonge Industries had outstanding 700,000 common shares ($1 par) that originally sold for $25 per share, and 5,000 shares of 10% cumulative preferred stock ($100 par), convertible into 50,000 common shares. On October 1, 2018, Tonge sold and issued an additional 12,000 shares of common stock at $37. At December 31, 2018, there were 22,000 incentive stock options outstanding, issued in 2017, and exercisable after one year for 22,000 shares of common stock at an exercise price of $34. The market price of the common stock at year-end was $52. During the year, the price of the common shares had averaged $44. Net income was $840,000. The tax rate for the year was 40%. Required Compute basic and diluted EPS for the year ended December 31, 2018. (Enter your answers in thousands.) NumeratorDenominatorEarnings per share Basic DilutedExplanation / Answer
Diluted EPS
Basic EPS Common Stock Weightage Weighted Average Jan-01 Opening balance 700000 12/12 700000 Oct-01 Issued 12000 3/12 3000 No of shares 703000