Multiple Choice
Austin Products reported $350,000 net income for the year with 100,000 outstanding common shares all year.Austin issued 50,000 shares of $100,8% convertible preferred shares on March 1.Each preferred share is convertible into 10 shares of common stock.Determine the numerator for both basic and diluted EPS.
A) basic EPS $350,000 - [(50,000 × $100 × 8%) (2/12) ]; diluted EPS $350,000
B) basic EPS $350,000 - [(50,000 × $100 × 8%) (2/12) ]; diluted EPS $350,000 - (50,000 × $100 × 8%)
C) basic EPS $350,000; diluted EPS $350,000
D) basic EPS $350,000 - [(50,000 × $100 × 8%) (10/12) ]; diluted EPS $350,000
Correct Answer:
Verified
Correct Answer:
Verified
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