I. On January 1, 20×1, Wilk Corp. had 480,000 shares of common stock outstanding. During 20×1, it had the following transactions that affected the common stock account.
2/1 Issued 120,000 shares
3/1 Declared and distributed a 10% stock dividend
5/1 Acquired 100,000 shares of treasury stock
6/1 Issued a 3-for-1 stock split
10/1 Reissued 60,000 shares of treasury stock
Wilke Corp. earned net income of $3,456,000 during 20×1. In addition, it had 100,000 of shares of 9%, $100 par nonconvertible, cumulative preferred stock outstanding for the entire year. Because of liquidity considerations, the company did not declare and pay a preferred dividend in 20×1.
Compute EPS for 20×1.
II. Venz Company’s net income for 20×1 is $50,000. The only potentially dilutive securities outstanding were 1,000 options issued during 20×0, each exercisable for one share at $6. None has been exercised, and 10,000 shares of common were outstanding during 20×1. The average market price of Venz’s stock during 20×1 was $20.
Compute diluted EPS for 20×1.
