1.Pastore Inc. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $25 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $5.50 per option.
If the options have a vesting period of five years, what would be the balance in “Paid-in Capital – Stock Options” three years after the grant date? A.A credit of $9.2 million. B.A debit of $3.3 million. C.A debit of $9.2 million. D.A credit of $3.3 million.
2. On December 31, 2012, the Bennett Company had 115,000 shares of common stock issued and outstanding. On July 1, 2013, the company sold 21,000 additional shares for cash. Bennett’s net income for the year ended December 31, 2013, was $630,000. During 2013, Bennett declared and paid $85,000 in cash dividends on its nonconvertible preferred stock. What is the 2013 basic earnings per share? (Round your answer to 2 decimal places.) A.$5.02. B.$4.74. C.$4.34. D.None of these is correct.
3. Dulce Corporation had 190,000 shares of common stock outstanding during the current year. There were also fully vested options for 11,000 shares of common stock were granted with an exercise price of $20. The market price of the common stock averaged $25 for the year. Net income was $4.7 million. What is diluted EPS? (Round your answer to 2 decimal places.) A.$26.26. B.$23.38. C.$24.45. D.$24.74.
4. Dublin Inc. had the following common stock record during the current calendar year:
Outstanding-beginning of year 2,550,000 Additional share issued 6/30 290,000 Additional share issued 9/30 290,000
A 14% stock dividend was paid on December 1. What is the number of shares to be used in computing basic EPS? A.3,237,600. B.3,154,950. C.3,072,300. D.2,767,500.
5. At December 31, 2013 and 2012, G Co. had 54,000 shares of common stock and 6,800 shares of 5%, $100 par value cumulative preferred stock outstanding. No dividends were declared on either the preferred or common stock in 2013 or 2012. Net income for 2013 was $520,000. For 2013, basic earnings per common share amounted to: (Round your answer to 2 decimal places.)
A.$5.00. B.$8.55. C.$9.63. D.$9.00.
6. At December 31, 2013, Hansen Corporation had 44,000 shares of common stock and 5,500 shares of 10%, $100 par cumulative preferred stock outstanding. No dividends were declared or paid in 2013. Net income was reported as $250,000. What is basic EPS? (Round your answer to 2 decimal places.) A.$5.05. B.$6.49. C.$4.43. D.$5.68.
7. On January 1, 2013, Hage Corporation granted incentive stock options to purchase 19,000 of its common shares at $9 each. The options are exercisable after one year. The market price of common averaged $11 per share during the quarter ending on March 31, 2013. There was no change in the 115,000 shares of outstanding common stock during the quarter ended March 31, 2013. Net income for the quarter was $8,368. The number of shares to be used in computing diluted earnings per share for the quarter is:
A.115,000. B.134,000. C.118,455. D.130,545.
8. During the current year, East Corporation had 4 million shares of common stock outstanding. 3,400, $1,000, 7% convertible bonds were issued at face amount at the beginning of the year. East reported income before tax of $9 million and net income of $5.4 million for the year. Each bond is convertible into 10 shares of common stock. What is diluted EPS? (Round your answer to 2 decimal places. Do not round your intermediate calculations.) A.$1.34. B.$1.35. C.$1.37. D.$1.39.
9. Ignatius Corporation had 12 million shares of common stock outstanding during the current calendar year. It issued 15,000, $1,000, convertible bonds on January 1. Each bond is convertible into 50 shares of common stock. The bonds were issued at face amount and pay interest quarterly at an annual rate of 12%. On June 30, Ignatius issued 150,000 shares of $100 par 6% cumulative preferred stock. Dividends are declared and paid semiannually. Ignatius has an effective tax rate of 40%. Ignatius would report the following EPS data (rounded to 2 decimal places) on its net income of $25 million:
Basic EPS Diluted EPS a. $2.12 $1.96 b. $2.05 $2.01 c. $2.08 $1.96 d. $2.05 $2.08
A.Option d B.Option a C.Option c D.Option b