On January 1, 2020, to motivate top management, Resume Inc. granted 2,600 options to purchase common stock at $10 per share to key officers if net income increased by 5% in 2020 over the prior year. The fair value of the options on January 1, 2020, is estimated to be $13,000. Resume Inc. reported net income of $130,000 in 2020, which represented a 7% increase over the prior year. How will the options affect the calculation of the company's 2020 diluted earnings per share? Increase the denominator ✓by 100 x shares.
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- Ivanhoe, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 960 shares @ $14 each $13,440 Rogers Company 880 shares @ $20 each 17,600 Chance Company 520 shares @ $10 each 5,200 Equity investments @ cost 36,240 Fair value adjustment (7,300 ) Equity investments @ fair value $28,940 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $2 per share dividend. 2. On April 30, Ivanhoe, Inc. sold 320 shares of Chance Company for $11 per share. 3. On May 15, Ivanhoe, Inc. purchased 100 more shares of Evers Company stock at $17 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $18, Rogers $19, and Chance $9. During 2021, the following transactions took place. 5. On February 1, Ivanhoe, Inc. sold the remaining Chance shares for $9 per share. 6. On March 1, Rogers Company paid a $2 per share…Ivanhoe, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 960 shares @ $14 each $13,440 Rogers Company 880 shares @ $20 each 17,600 Chance Company 520 shares @ $10 each 5,200 Equity investments @ cost 36,240 Fair value adjustment (7,300 ) Equity investments @ fair value $28,940 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $2 per share dividend. 2. On April 30, Ivanhoe, Inc. sold 320 shares of Chance Company for $11 per share. 3. On May 15, Ivanhoe, Inc. purchased 100 more shares of Evers Company stock at $17 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $18, Rogers $19, and Chance $9. During 2021, the following transactions took place. 5. On February 1, Ivanhoe, Inc. sold the remaining Chance shares for $9 per share. 6. On March 1, Rogers Company paid a $2 per share…Tamarisk, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 950 shares @ $16 each $15,200 Rogers Company 910 shares @ $20 each 18,200 Chance Company 480 shares @ $8 each 3,840 Equity investments @ cost 37,240 Fair value adjustment (7,240 ) Equity investments @ fair value $30,000 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $2 per share dividend. 2. On April 30, Tamarisk, Inc. sold 280 shares of Chance Company for $10 per share. 3. On May 15, Tamarisk, Inc. purchased 90 more shares of Evers Company stock at $17 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $18, Rogers $19, and Chance $7. During 2021, the following transactions took place. 5. On February 1, Tamarisk, Inc. sold the remaining Chance shares for $7 per share. 6. On March 1, Rogers Company paid a $2 per share…
- Castleman Holdings, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 1,000 shares @ $15 each $15,000 Rogers Company 900 shares @ $20 each 18,000 Chance Company 500 shares @ $9 each 4,500 Equity investments @ cost 37,500 Fair value adjustment (7,500) Equity investments @ fair value $30,000 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $2 per share dividend. 2. On April 30, Castleman Holdings, Inc. sold 300 shares of Chance Company for $11 per share. 3. On May 15, Castleman Holdings, Inc. purchased 100 more shares of Evers Company stock at $16 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $17, Rogers $19, and Chance $8. During 2021, the following transactions took place. 5. On February 1, Castleman Holdings, Inc. sold the remaining Chance shares for $8 per share. 6. On March 1, Rogers Company paid a $2 per share dividend.…Venzuela Company's net income for 2020 is $50,000. The only potentially dilutive securities outstanding were 1,000 options issued during 2019, each exercisable for one share at $6. None has been exercised, and 10,000 shares of common were outstanding during 2020. The average market price of Venzuela's stock during 2020 was $20. Instructions a. Compute diluted earnings per share. (Round to nearest cent.) b. Assume the same facts as those assumed for part (a), except that the 1,000 options were issued on October 1, 2020 (rather than in 2019). The average market price during the last 3 months of 2020 was $20.Oriole, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 960 shares @ $ 14 each $ 13,440 Rogers Company 880 shares @ $ 20 each 17,600 Chance Company 520 shares @ $ 10 each 5,200 Equity investments @ cost 36,240 Fair value adjustment ( 7,300 ) Equity investments @ fair value $ 28,940 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $ 2 per share dividend. 2. On April 30, Oriole, Inc. sold 320 shares of Chance Company for $ 11 per share. 3. On May 15, Oriole, Inc. purchased 100 more shares of Evers Company stock at $ 17 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $ 18, Rogers $ 19, and Chance $ 9. During 2021, the following transactions took place. 5. On February 1, Oriole, Inc. sold the remaining Chance shares for $ 9 per share. 6. On March 1, Rogers Company paid a $ 2…
- Oriole, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 960 shares @ $ 14 each $ 13,440 Rogers Company 880 shares @ $ 20 each 17,600 Chance Company 520 shares @ $ 10 each 5,200 Equity investments @ cost 36,240 Fair value adjustment ( 7,300 ) Equity investments @ fair value $ 28,940 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $ 2 per share dividend. 2. On April 30, Oriole, Inc. sold 320 shares of Chance Company for $ 11 per share. 3. On May 15, Oriole, Inc. purchased 100 more shares of Evers Company stock at $ 17 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $ 18, Rogers $ 19, and Chance $ 9. During 2021, the following transactions took place. 5. On February 1, Oriole, Inc. sold the remaining Chance shares for $ 9 per share. 6. On March 1, Rogers Company paid a $ 2…On January 1, 2021, Farmer Fabrication issued stock options for 100,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Farmer initially estimates that it is probable the goal will be achieved. How much compensation will be recorded in 2021, 2022, 2023?On Jan. 1, 2020, Hufflepuff Industries, Inc. issues stock options for 100,000 shares to a regional manager. The options have an estimated fair value of $6 each. The provide additional incentive for the manager's achievement, the options are not exercisable unless the region revenue increase by 8% in three years. Hufflepuff initially estimates that it is probable that the goal will be achieved. How much compensation will be recorded in 2020, 2021, and 2022, the vesting period?
- On October 1, 2024, Halsey Company issued stock options for 300,000 shares to a division manager. The options have an estimated fair value of $3 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 6% in three years. Halsey initially estimates that it is probable the goal will be achieved. How much compensation will be recorded in each of the next three years? A.$0 B.$100,000 C.$300,000 D.$900,000On January 1, 2021, Farmer Fabrication issued stock options for 280,000 shares to a division manager. The options have an estimated fair value of $5 each. To provide additional incentive for managerial achievement, the options are not exercisable unless Farmer Fabrication’s stock price increases by 2% in three years. Farmer initially estimates that it is not probable the goal will be achieved. How much compensation will be recorded in 2021, 2022, and 2023?Oriole, Inc. had the following equity investment portfolio at January 1, 2020. Evers Company 970 shares @ $14 each $13,580 Rogers Company 910 shares @ $18 each 16,380 Chance Company 500 shares @ $9 each 4,500 Equity investments @ cost 34,460 Fair value adjustment (7,840 ) Equity investments @ fair value $26,620 During 2020, the following transactions took place. 1. On March 1, Rogers Company paid a $2 per share dividend. 2. On April 30, Oriole, Inc. sold 290 shares of Chance Company for $11 per share. 3. On May 15, Oriole, Inc. purchased 90 more shares of Evers Company stock at $17 per share. 4. At December 31, 2020, the stocks had the following price per share values: Evers $18, Rogers $17, and Chance $8. During 2021, the following transactions took place. 5. On February 1, Oriole, Inc. sold the remaining Chance shares for $8 per share. 6. On March 1, Rogers Company paid a $2 per share dividend.…