Q1. Santana Corporation has 420,000 shares of common stock outstanding throughout 2018. In addition, the corporation has 4,500, 20-year, 8% bonds issued at par in 2016. Each $1,000 bond is convertible into 20 shares of common stock after 9/23/19. During the year 2018, the corporation earned $714,840 after deducting all expenses. The tax rate was 30%.
Compute the proper earnings per share for 2018.
Q2. On January 1, 2018, Warren Corporation had 1,030,000 shares of common stock outstanding. On March 1, the corporation issued 140,000 new shares to raise additional capital. On July 1, the corporation declared and issued a 2-for-1 stock split. On October 1, the corporation purchased on the market 520,000 of its own outstanding shares and retired them.
Compute the weighted average number of shares to be used in computing earnings per share for 2018.