During its first year of operations, McCollum Tool Works entered into the follow

Question

During its first year of operations, McCollum Tool Works entered into the following transactions relating to shareholders' equity. The corporation was authorized to issue 100 million common shares, $1 par per share. Jan. 2 Issued 35 million common shares for cash. 3 Entered an agreement with the company president to issue up to 2 million additional shares of common stock in 2017 based on the earnings of McCollum in 2017. If net income exceeds $140 million, the president will receive 1 million shares; 2 million shares if net income exceeds $150 millie Mar. 31 Issued 4 million shares in exchange for plant facilities. Net income for 2016 was $144 million. Required: Compute basic and diluted earnings per share for the year ended December 31, 2016. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) NumeratorDenominatorEarnings per Share Basic EPS Diluted EPS

Explanation / Answer

Basic EPS = 144/38=3.789

Diluted EPS = 144/39 = 3.69

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