Edwards and Everett, Inc.had the following items in its capital structure at December 31, 2020: Common stock options, issued in 2019, exercisable for 22,000 shares, beginning in 2022, at a "strike" price of $20 per share. The cash that would be received from the option-holders from a hypothetical exercise of the options at December 31, 2020 would be sufficient for Edwards & Everett to acquire 13,400 shares of its own common stock (as treasury stock). Treasury stock, common, 20,000 shares, acquired on November 30, 2019 $ 280,000 Additional paid-in-capital. 760,000 Common stock, $10 stated value, issued January 2, 2019 (current market value, $17 per share). 1,200,000 Preferred stock, 10%, $8 par value, convertible into 146,000 common shares no earlier than 2020, issued at par value on July 1, 2020 (current market value, $8 per share). 1,660,000 Stock warrants, issued in 2019 in exchange for legal services at the company's formation, convertiīble into 1,300 shares of common stock at the discretion of the warrant-holders, but not earlier than 2022. A hypothetical conversion of the warrants at December 31, 2020 would require a $14,000 cash payment from the warrant-holders, which would be sufficient for Edwards & Everetto acquire 300 shares of its own common stock (as treasury stock). 20,000 Edwards & Everett's net income for 2020 was $783,000; the company's Board of Directors has not yet declared a dividend for 2020 for the preferred shareholders. What earnings per share did Edwards and Everett, Inc. report for the year ended December 31, 2020? Prepare a schedule to support your answer
Edwards and Everett, Inc.had the following items in its capital structure at December 31, 2020: Common stock options, issued in 2019, exercisable for 22,000 shares, beginning in 2022, at a "strike" price of $20 per share. The cash that would be received from the option-holders from a hypothetical exercise of the options at December 31, 2020 would be sufficient for Edwards & Everett to acquire 13,400 shares of its own common stock (as treasury stock). Treasury stock, common, 20,000 shares, acquired on November 30, 2019 $ 280,000 Additional paid-in-capital. 760,000 Common stock, $10 stated value, issued January 2, 2019 (current market value, $17 per share). 1,200,000 Preferred stock, 10%, $8 par value, convertible into 146,000 common shares no earlier than 2020, issued at par value on July 1, 2020 (current market value, $8 per share). 1,660,000 Stock warrants, issued in 2019 in exchange for legal services at the company's formation, convertiīble into 1,300 shares of common stock at the discretion of the warrant-holders, but not earlier than 2022. A hypothetical conversion of the warrants at December 31, 2020 would require a $14,000 cash payment from the warrant-holders, which would be sufficient for Edwards & Everetto acquire 300 shares of its own common stock (as treasury stock). 20,000 Edwards & Everett's net income for 2020 was $783,000; the company's Board of Directors has not yet declared a dividend for 2020 for the preferred shareholders. What earnings per share did Edwards and Everett, Inc. report for the year ended December 31, 2020? Prepare a schedule to support your answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Edwards and Everett, Inc.had the following items in its capital structure at December 31, 2020:
Common stock options, issued in 2019, exercisable for 22,000 shares,
beginning in 2022, at a "strike" price of $20 per share. The cash that would
be received from the option-holders from a hypothetical exercise of the
options at December 31, 2020 would be sufficient for Edwards & Everett
to acquire 13,400 shares of its own common stock (as treasury stock).
Treasury stock, common, 20,000 shares, acquired on November 30, 2019
$ 280,000
Additional paid-in-capital
760,000
Common stock, $10 stated value, issued January 2, 2019
(current market value, $17 per share).
1,200,000
Preferred stock, 10%, $8 par value, convertible into 146,000 common
shares no earlier than 2020, issued at par value on July 1, 2020
(current market value, $8 per share)..
1,660,000
Stock warrants, issued in 2019 in exchange for legal services at the company's
formation, convertīble into 1,300 shares of common stock at the
discretion of the warrant-holders, but not earlier than 2022. A
hypothetical conversion of the warrants at December 31, 2020 would
require a $14,000 cash payment from the warrant-holders, which would
be sufficient for Edwards & Everetto acquire 300 shares of its own
common stock (as treasury stock)..
20,000
Edwards & Everett's net income for 2020 was $783,000; the company's Board of Directors has not
yet declared a dividend for 2020 for the preferred shareholders.
What earnings per share did Edwards and Everett, Inc. report for the year ended December 31, 2020?
Prepare a schedule to support your answer
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