Ask Question
1 September, 19:01

Nolte Co. has 4,800,000 shares of common stock outstanding on December 31, 2017. An additional 200,000 shares are issued on April 1, 2018, and 480,000 more on September 1. On October 1, Nolte issued $6,000,000 of 9% convertible bonds. Each $1,000 bond is convertible into 40 shares of common stock. No bonds have been converted. The number of shares to be used in computing basic earnings per share and diluted earnings per share on December 31, 2018 is1. 5,110,000 and 3,050,000.2. 5,880,000 and 5,320,000.3. 5,110,000 and 5,170,000.4. 5,110,000 and 5,110,000.

+5
Answers (1)
  1. 1 September, 20:12
    0
    3. 5,110,000 and 5,170,000

    Explanation:

    Number of shares to be used in computing basic earnings per share

    = 4800000*12/12 + 200000*9/12 + 4800004/12

    = 4800000 + 150000 + 160000

    = 5,110,000

    Number of shares to be used in computing dilute earnings per share

    = 4800000*12/12 + 200000*9/12 + 4800004/12 + (6000000/1000) * 40*3/12

    = 4800000 + 150000 + 160000 + 60000

    = 5,170,000

    Therefore, The number of shares to be used in computing basic earnings per share and diluted earnings per share on December 31, 2018 is 5,110,000 and 5,170,000.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Nolte Co. has 4,800,000 shares of common stock outstanding on December 31, 2017. An additional 200,000 shares are issued on April 1, 2018, ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers