Calculating basic earnings per share


Q1) The given applies to Dunbar Corp for 2008:

Transactions in Common Shares                          Change            Shares Outstanding

1/1/08 Beginning Shares Outstanding                                         1,000,000

3/1/08 Purchases of Treeasury Shares                 (600,000)           940,000

6/1/08 Stock Split 2 -for - 1                                 940,000           1,880,000

11/1/08 Issuance of Additional shares                   120,000              2,000,000

Outstanding Stock Options (Granted in 2006)

Option for 60,000 shares exercisable at option price of $25 per share Average 2008 market price was $30 per shared,

Convertible Bonds (Issued December1, 2008)

$5 million of 4% bonds convertible to 400,000 shards of common stock.

Net income in 2008 was $3,200,000 Dunbar's tax rate is 35%

i) Calculate basic earnings per share for 2008

ii) Calculate diluted earnings per share for 2008.

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Accounting Basics: Calculating basic earnings per share
Reference No:- TGS016453

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