questionpeak performance inc reported total

Question

Question:

Peak Performance Inc. reported total income of $250,000 for the year ended December 31, 2009. Peak Performance Inc. had 40,000 shares of general stock outstanding throughout 2009. On 1^st July, 2008, Peak issued 5,000 stock options. Every stock option allows the holder to purchase a share of stock for $10 and can be exercised after July 1, 2009. Various prices for the stock were as follows:

July 1, 2008         $ 9.00

January 1, 2009    9.50

December 31, 2009   12.50

Average price for 2009  10.87

Peak Performance has no preferred stock and a 30 percent income tax rate.

Required:

1. Determine the basic EPS and the diluted EPS for Peak Performance Inc. for 2009.

Peak Performance has no preferred stock and a 30 % income tax rate.