Exercise 19-19 (Algo) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold; stock options; convertible bonds [LO19-5,19-6, 19-7, 19-8, 19-9] On December 31, 2023, Berclair Incorporated had 480 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2024. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2024, was $750 million. The income tax rate is 25%. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2019. The options are exercisable as of September 13, 2023, for 30 million common shares at an exercise price of $56 per share. During 2024, the market price of the common shares averaged $70 per share. In 2020, $50.0 million of 8% bonds, convertible into 6 million common shares, were issued at face value. Required: Compute Berclair’s basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible securities have been adjusted for any stock split or stock dividend.) Note: Do not round intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).

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

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 16E: Contributed Capital Adams Companys records provide the following information on December 31, 2019:...

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Exercise 19-19 (Algo) EPS; stock dividend; nonconvertible preferred stock; treasury shares; shares sold; stock options; convertible bonds [LO19-5,19-6, 19-7, 19-8, 19-9] On December 31, 2023, Berclair Incorporated had 480 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2024. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2024, was $750 million. The income tax rate is 25%. Also outstanding at December 31 were incentive stock options granted to key executives on September 13, 2019. The options are exercisable as of September 13, 2023, for 30 million common shares at an exercise price of $56 per share. During 2024, the market price of the common shares averaged $70 per share. In 2020, $50.0 million of 8% bonds, convertible into 6 million common shares, were issued at face value. Required: Compute Berclair’s basic and diluted earnings per share for the year ended December 31, 2024. (Shares for stock options and conversion of convertible securities have been adjusted for any stock split or stock dividend.) Note: Do not round intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).

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