Anderson Steel Company began 2021 with 520,000 shares of common stock outstanding. On March 31, 2021, 200,000 new shares were sold at a price of $80 per share. The market price has risen steadily since that time to a high of $85 per share at December 31. No other changes in shares occurred during 2021, and no securities are outstanding that can become common stock. However, there are two agreements with officers of the company for future issuance of common stock. Both agreements relate to compensation arrangements reached in 2020. The first agreement grants to the company president a right to 36,000 shares of stock each year the closing market price is at least $83. The agreement begins in 2022 and expires in 2025. The second agreement grants to the controller a right to 41,000 shares of stock if she is still with the firm at the end of 2029. Net income for 2021 was $4,600,000. Required: Compute Anderson Steel Company's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Do not round intermediate calculations.) Basic Diluted Answer is complete but not entirely correct. Earnings per Share 6.87 5.38 Numerator $4,600,000/ $4,600,000 1 Denominator 670,000 855,000
Anderson Steel Company began 2021 with 520,000 shares of common stock outstanding. On March 31, 2021, 200,000 new shares were sold at a price of $80 per share. The market price has risen steadily since that time to a high of $85 per share at December 31. No other changes in shares occurred during 2021, and no securities are outstanding that can become common stock. However, there are two agreements with officers of the company for future issuance of common stock. Both agreements relate to compensation arrangements reached in 2020. The first agreement grants to the company president a right to 36,000 shares of stock each year the closing market price is at least $83. The agreement begins in 2022 and expires in 2025. The second agreement grants to the controller a right to 41,000 shares of stock if she is still with the firm at the end of 2029. Net income for 2021 was $4,600,000. Required: Compute Anderson Steel Company's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Do not round intermediate calculations.) Basic Diluted Answer is complete but not entirely correct. Earnings per Share 6.87 5.38 Numerator $4,600,000/ $4,600,000 1 Denominator 670,000 855,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Anderson Steel Company began 2021 with 520,000 shares of common stock outstanding. On March 31, 2021, 200,000 new shares
were sold at a price of $80 per share. The market price has risen steadily since that time to a high of $85 per share at December 31.
No other changes in shares occurred during 2021, and no securities are outstanding that can become common stock. However, there
are two agreements with officers of the company for future issuance of common stock. Both agreements relate to compensation
arrangements reached in 2020. The first agreement grants to the company president a right to 36,000 shares of stock each year the
closing market price is at least $83. The agreement begins in 2022 and expires in 2025. The second agreement grants to the
controller a right to 41,000 shares of stock if she is still with the firm at the end of 2029. Net income for 2021 was $4,600,000.
Required:
Compute Anderson Steel Company's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your
answers in thousands. Do not round intermediate calculations.)
Basic
Diluted
Answer is complete but not entirely correct.
Earnings per Share
6.87
5.38
Numerator
$4,600,000
$4,600,000/
Denominator
670,000
855,000 -
55
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