Foley Company has 1,800,000 shares of common stock outstanding on December 31, 2007. An additional 150,000 shares of common stock were issued on July 1, 2008, and 300,000 more on October 1, 2008. On April 1, 2008, Foley issued 6,000, $1,000 face value, 8% convertible bonds. Each bond is convertible into 40 shares of common stock. No bonds were converted into common stock in 2008. What is the number of shares to be used in computing basic earnings per share and diluted earnings per share, respectively, for the year ended December 31, 2008?
A) 1,950,000 and 2,130,000
B) 1,950,000 and 1,950,000
C) 1,950,000 and 2,190,000
D) 2,250,000 and 2,430,000

Question

Quizplus · Accepted Answer

1,800,000 + (150,000 × 6/12) + (300,000 × 3/12) = 1,950,000
1,950,000 + (6,000 × 40 × 9/12) = 2,130,000.

Foley Company Has 1,800,000 Shares of Common Stock Outstanding on December