WahlenInt3ePR16-26

P16-26Name: Complete the schedules by entering the appropriate amounts in the green-shaded cells. An asterisk (*) will appear before incorrect amounts entered in the answer cells. 1.OLMSTEAD CORPORATION Weighted Average Number of Common Shares for Computation of Basic Earnings per Share For Year Ended December 31, 2019 TimeWeighted DatesSharesxOutstanding=Shares January 1 - August 31300,0002/3200,000 September 1, sold additional shares336,0001/3 112,000 Weighted average number of shares outstanding312,000 2.OLMSTEAD CORPORATION Computation of Basic Earnings per Share For Year Ended December 31, 2019 Income: Net Income$750,000 Deduct dividends paid on preferred stock(30,000) Net Income, adjusted$720,000 Number of shares (Requirement 1)312,000 Basic earnings per share$2.31 3.OLMSTEAD CORPORATION Number of Shares for Computation of Diluted Earnings per Share For Year Ended December 31, 2019 Weighted average number of shares outstanding312,000 Stock options and warrants: From share options-dilutive11,250 From warrants-antidilutive- Shares assumed to be issued upon conversion of convertible bonds40,000 Total number of shares for diluted EPS computation363,250 4.OLMSTEAD CORPORATION Computation of Diluted Earnings per Share For Year Ended December 31, 2019 Income: Net Income$750,000 Deduct dividends paid on preferred stock(30,000) $720,000 Add interest expense (net of income tax effect) on convertible bonds56,000 Net income, adjusted$776,000 Number of shares (Requirement 3)363,250 Diluted earnings per share$2.14