Question: For the year ended December 31, 2016, Joey Co. reported Net Income of $800,000. At January 1, 2016 the company had 900,000 shares of common stock outstanding. Joey Co. also had $1,000,000 of 6% cumulative preferred stock. No preferred dividends were paid in 2016 and the preferred stock is non-convertible. The following changes in the number of shares occurred during 2016:
April 1: Sold 60,000 shares of common stock.
May 31: Declared and Distributed a 10% Stock Dividend
July 1: Issued 72,000 shares of common stock
Required: 1. Compute Joey Co's earnings per share for the year ended December 31, 2016.
2. Given the facts as presented above, Joey Co would have to report Diluted EPS at 12/31/2016.
TRUE or FALSE [Circle One]
3) Explain your answer in part 2 above (brief short answer)