Scantron SelfScore\" Test Sheet 100 TRON n6173 per share? No effect 2 When compu

Question

Scantron SelfScore" Test Sheet 100 TRON n6173 per share? No effect 2 When computing diluted earnings per share, convertble prefemed stocks are a ignored. b. assumed converted whether they are dilutive or anddlutive c. assumed converted only if they are antidilutive. d assumed converted only if they are dlutive 3) Loeb Co. had 600,000 shares of common stock outstanding on Jamary 1 stock on September 1, and ssued 36,000 shares on November 1.e issued 84,000 shares on May 1, parchased 1. The weighted average shares outstanding for the yar is b. 648,000. . 662,000. d. 676,000. Benn, Incorporated, has 6,000,000 shares of common stock I outstanding on December 31, 2017. An aiditional 1,00000shars common stock were issued on Apri 1, 2018, and 500,000 more on July 1, 2018 On October 1, 2018, Bern issued 25,000, $1,000 face value, 8% converttle bonds. Each bond is convertible ito 20 shares of common stock le bons oorred mo stock in 2018. What was the number of shares to be used in computing basic earnings per share? a. 7,000,000 b 7,125,000 c 7,500,000 d. 8,500,000 See # above. What was the number ofshares to be used n computigated earne, per snare a. 7,000,000 b. 7.125,000 c. 7,500,000 d. 8,500,000

Explanation / Answer

1. Increase

Reason- When the company repurchased its treasury shares, the total sum of equity account including common stock decreases by the value of shares purchased.

Earning per share is find out by dividing Net income by total outstanding equity shares.

Hence, when the common stock decreases, outstanding equity shares also decreases. Net income shall remain same. This effect will increase the earning per share.

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