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Connect .> C Secure ! https://newconnect.mheducation.com/flow/connect.html Ch. 19 - Brief Exercises (80 minutes) Saved Help Save & Exlt Submlt 3 Check my work 15 Brief Exercise 19-15 EPS; convertible preferred shares [LO19-9] Ahnberg Corporation had 640,000 shares of common stock issued and outstanding at January 1. No common shares were issued during the year, but on January 1, Ahnberg issued 260,000 shares of convertible preferred stock. The preferred shares are convertible into 520,000 shares of common stock. During the year Ahnberg paid $156,000 cash dividends on the preferred stock. Net income was $1,756,000 6.25 points eBook What were Ahnberg's basic and diluted earnings per share for the year? (Round your answers to 2 decimal places.) References Basic EPS Diluted EPS Mc Graw Hill ?Prex 15 of 16 ? Next> 8:35 PM ^??4, 4/17/2018 |

Explanation / Answer

Answer:

Basic EPS

2.5

per share

Diluted EPS

1.51

per share

Working notes for the above answer is as under

1

Basic EPS
=net income- preferred dividends

=1756,000-156,000 /640,000

=1,600,000/640,000

=$2.50 per share

2

Diluted EPS

= Net income / common share+ shares conversion* at Jan 1 of preferred shares

=1,756,0000/ 640,000+520,000

=1,756,000/1,160,000

=1.51 per share

Basic EPS

2.5

per share

Diluted EPS

1.51

per share

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