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On February 28, 2021, Dow sold 56,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2021, was $2,400,000. The income tax rate is 25%. Also, as a part of a 2020 agreement for the acquisition of Merrill Cable Company, another 29,000 shares (already adjusted for the stock dividend) are to be issued to former rrill shareholders on December 31, 2022, if Merrill's 2022 net income is at least $560,000. In 2021, Merrill's net income was $690,00. As part of an incentive compensation plan, Dow granted incentive stock options to division managers at December 31 of the current and each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal to market value at the date of grant and can be exercised one year from that date. Information concerning the number of options granted and common share prices follows: Options Granted (adjusted for the stock dividend) 13,000 8,000 11,500 Share Price $ 18 $ 27 $ 26 Date Granted December 31, 2019 December 31, 2020 December 31, 2021 The stock options issued in 2019 were not exercised in 2020 or 2021. The market price of the common stock averaged $26 per share during 2021. On July 12, 2019, Dow issued $1,000,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 30 common shares (adjusted for the stock dividend). Required: Compute Dow's hacir and dilı ted earnings ner share for the vear ended Decemher 31 2021 (Enter vour ansuere in thoICAnde

On February 28, 2021, Dow sold 56,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2021, was $2,400,000. The income tax rate is 25%. Also, as a part of a 2020 agreement for the acquisition of Merrill Cable Company, another 29,000 shares (already adjusted for the stock dividend) are to be issued to former rrill shareholders on December 31, 2022, if Merrill's 2022 net income is at least $560,000. In 2021, Merrill's net income was $690,00. As part of an incentive compensation plan, Dow granted incentive stock options to division managers at December 31 of the current and each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal to market value at the date of grant and can be exercised one year from that date. Information concerning the number of options granted and common share prices follows: Options Granted (adjusted for the stock dividend) 13,000 8,000 11,500 Share Price $ 18 $ 27 $ 26 Date Granted December 31, 2019 December 31, 2020 December 31, 2021 The stock options issued in 2019 were not exercised in 2020 or 2021. The market price of the common stock averaged $26 per share during 2021. On July 12, 2019, Dow issued $1,000,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 30 common shares (adjusted for the stock dividend). Required: Compute Dow's hacir and dilı ted earnings ner share for the vear ended Decemher 31 2021 (Enter vour ansuere in thoICAnde

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 26P
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Options Granted (adjusted for the stock dividend) Date Granted Share Price December 31, 2019 December 31, 2020 December 31, 2021 13,000 8,000 11,500 $18 $ 27 $ 26 The stock options issued in 2019 were not exercised in 2020 or 2021. The mar t price of the common stock averaged $26 per share during 2021. On July 12, 2019, Dow issued $1,000,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 30 common shares (adjusted for the stock dividend). Required: Compute Dow's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Round "Earnings per share" answers to 2 decimal places. Do not round intermediate calculations) Denominator Earnings per share %3D Numerator %3D Dow's basic %3D Dow's diluted
Transcribed Image Text:Options Granted (adjusted for the stock dividend) Date Granted Share Price December 31, 2019 December 31, 2020 December 31, 2021 13,000 8,000 11,500 $18 $ 27 $ 26 The stock options issued in 2019 were not exercised in 2020 or 2021. The mar t price of the common stock averaged $26 per share during 2021. On July 12, 2019, Dow issued $1,000,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 30 common shares (adjusted for the stock dividend). Required: Compute Dow's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Round "Earnings per share" answers to 2 decimal places. Do not round intermediate calculations) Denominator Earnings per share %3D Numerator %3D Dow's basic %3D Dow's diluted
On February 28, 2021, Dow sold 56,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2021, was $2,400,000. The income tax rate is 25%. Also, as a part of a 2020 agreement for the acquisition of Merrill Cable Company, another 29,000 shares (already adjusted for the stock dividend) are to be issued to former Merrill shareholders on December 31, 2022, if Merrill's 2022 net income is at least $560,000. In 2021, Merrill's net income was $690,000. As part of an incentive compensation plan, Dow granted incentive stock options to division managers at December 31 of the current and each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal to market value at the date of grant and can be exercised one year from that date. Information concerning the number of options granted and common share prices follows: Options Granted (adjusted for the stock dividend) 13,000 8,000 11,500 Share Price $ 18 $ 27 $ 26 Date Granted December 31, 2019 December 31, 2020 December 31, 2021 The stock options issued in 2019 were not exercised in 2020 or 2021. The market price of the common stock averaged $26 per share during 2021. On July 12, 2019, Dow issued $1,000,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 30 common shares (adjusted for the stock dividend). Required: Compute Dow's hasic and diluted earnings ner share for the vear endedl December 31. 2021 (Enter vour answere in thousands
Transcribed Image Text:On February 28, 2021, Dow sold 56,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2021, was $2,400,000. The income tax rate is 25%. Also, as a part of a 2020 agreement for the acquisition of Merrill Cable Company, another 29,000 shares (already adjusted for the stock dividend) are to be issued to former Merrill shareholders on December 31, 2022, if Merrill's 2022 net income is at least $560,000. In 2021, Merrill's net income was $690,000. As part of an incentive compensation plan, Dow granted incentive stock options to division managers at December 31 of the current and each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal to market value at the date of grant and can be exercised one year from that date. Information concerning the number of options granted and common share prices follows: Options Granted (adjusted for the stock dividend) 13,000 8,000 11,500 Share Price $ 18 $ 27 $ 26 Date Granted December 31, 2019 December 31, 2020 December 31, 2021 The stock options issued in 2019 were not exercised in 2020 or 2021. The market price of the common stock averaged $26 per share during 2021. On July 12, 2019, Dow issued $1,000,000 of convertible 8% bonds at face value. Each $1,000 bond is convertible into 30 common shares (adjusted for the stock dividend). Required: Compute Dow's hasic and diluted earnings ner share for the vear endedl December 31. 2021 (Enter vour answere in thousands
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