Answer to Question #195306 in Accounting for Milan

Question

Anson Company had 8,000,000 shares of common stock outstanding on December 31, Year 11. Anson issued an additional 1,200,000 shares of common stock on April 1, Year 12, and 1,000,000 more on July 1, Year 12. On October 1, Year 12, Anson issued 50,000 of $1,000 face value 4% convertible bonds. Each bond is convertible into 20 shares of common stock. No bonds were converted into common stock in Year 12. What is the number of shares to be used in computing basic earnings per share and diluted earnings per share, respectively, in Year 12? 

A. 8,000,000 and 8,000,000

B. 9,400,000 and 9,400,000

C. 9,400,000 and 9,650,000

D. 7,500,000 and 8,500,000

Answer 1

Anson Company has the following weighted average outstanding shares position for the Year 12 for Basic EPS and Diluted EPS.

Thus 9,400,000 will be used to calculate basic earnings per share and 9,650,000 will be used to calculate the Diluted earnings per share.

Correct Option:C. 9,400,000 and 9,650,000