The following data for the Dojo Company for 2012 is available: Net Income (after

Question

The following data for the Dojo Company for 2012 is available:
Net Income (after taxes) $2,100,000
Tax Rate 40%

Transactions in Common Shares Change Cumulative
Jan. 1, 2012, Beginning number 700,000
Mar. 1, 2012, Purchase of treasury shares (60,000) 640,000
June 1, 2012, Stock split 2-1 640,000 1,280,000
Nov. 1, 2012, Issuance of shares 120,000 1,400,000

8% Cumulative Convertible Preferred Stock
Sold at par in 2010, convertible into 200,000 shares of common
(adjusted for split). $1,000,000

Stock Options
Exercisable at the option price of $25 per share. Average
market price in 2012, $30 (market price and option price
adjusted for split). 60,000 shares

8% Bonds Payable
Issued 1,000 nonconvertible debenture bonds at 99, 8% paid annually
on 12/31, $1000 maturity (each bond), issued on 1/1/12.
Instructions
(a) Compute the basic earnings per share for 2012. (Round to the nearest cent.) First show your computations for the weighted average number of shares outstanding below, and then the computation of basic earnings per share on the next page.

Weighted Average Number of Shares Outstanding: is the answer 1,043.333?


Basic Earnings Per Share: 2,100,000- 80,000/1,043,000 = 1.94 ??



Compute the diluted earnings per share for 2012.
Diluted Earnings Per Share

Explanation / Answer

Weighted Average Number of Shares Outstanding: I am also getting the answer to be $1043.34 That is right i guess and basic earnigs per share is 1.94%

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