FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:On June 1, 2023, Andre Company and Agassi Company merged to form Lancaster Inc. A total of 800,000 shares were issued to
complete the merger. The new corporation reports on a calendar-year basis.
On April 1, 2025, the company issued an additional 400,000 shares of stock for cash. All 1,200,000 shares were outstanding on
December 31, 2025.
Lancaster Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2025. Each $1,000 bond converts to 40 shares of
common at any interest date. None of the bonds have been converted to date.
Lancaster Inc. is preparing its annual report for the fiscal year ending December 31, 2025. The annual report will show earnings per
share figures based upon a reported after-tax net income of $1,540,000. (The tax rate is 20%.)
Determine the following for 2025.
a. The number of shares to be used for calculating: (Round answers to O decimal places, e.g. 2,500.)
1.
2.
Basic earnings per share
N
Diluted earnings per share
1. Basic earnings per share
2.
b. The earnings figures to be used for calculating: (Round answers to O decimal places, e.g. 2,500.)
Diluted earnings per share
$
$
69
shares
shares
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