Earnings per share-diluted earnings per share


Yoder, Incorporated, has 4,200,000 shares of common stock outstanding on December 31, 2012. An additional 800,000 shares of common stock were issued on April 1, 2013, and 400,000 more on July 1, 2013. On October 1, 2013, Yoder issued 20,000, $1,000 face value, 8% convertible bonds. Each bond is convertible into 20 shares of common stock. No bonds were converted into common stock in 2013. What is the number of shares to be used in computing basic earnings per share and diluted earnings per share, respectively?

A) 5,000,000 and 5,000,000

B) 5,000,000 and 5,100,000

C) 5,000,000 and 5,400,000

D) 5,400,000 and 6,200,000

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Accounting Basics: Earnings per share-diluted earnings per share
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