During 2013, Quattro entered into the following transactions relating to shareholders' equity. The corporation was authorized to issue 20 million common shares, $1 par per share.
Net income for 2013 was $110 million.
Jan. 2: Issued 10 million common shares for cash.
Jan. 3: Entered an agreement with the company president to issue up to 2 million additional shares of common stock in 2013 based on the earnings of Quattro in 2013. If net income exceeds $100 million, the president will receive 1 million shares; 2 million shares if net income exceeds $120 million.
Required:
Compute basic and diluted EPS for 2013.

Question

Quizplus · Accepted Answer

The Answer of During 2013, Quattro entered into the following transactions relating to shareholders' equity. The corporation was authorized to issue 20 million common shares, $1 par per share.
Net income for 2013 was $110 million.
Jan. 2: Issued 10 million common shares for cash.
Jan. 3: Entered an agreement with the company president to issue up to 2 million additional shares of common stock in 2013 based on the earnings of Quattro in 2013. If net income exceeds $100 million, the president will receive 1 million shares; 2 million shares if net income exceeds $120 million.
Required:
Compute basic and diluted EPS for 2013.

During 2013, Quattro Entered into the Following Transactions Relating to Shareholders