On December 31,2014,Luanne Inc.had outstanding 180,000 shares of common stock.Net income for 2014 was $285,000.Outstanding options (granted July 1,2014)to purchase 15,000 shares of common stock at $20 per share had not been exercised by December 31,2014.During 2014,market prices for Luanne's common stock were:

(1)Compute the basic earnings per common share in 2014.
(2)Compute the diluted earnings per common share in 2014.

Question

On December 31,2014,Luanne Inc.had outstanding 180,000 shares of common stock.Net income for 2014 was $285,000.Outstanding options (granted July 1,2014)to purchase 15,000 shares of common stock at $20 per share had not been exercised by December 31,2014.During 2014,market prices for Luanne's common stock were:
  
(1)Compute the basic earnings per common share in 2014.
(2)Compute the diluted earnings per common share in 2014.

Quizplus · Accepted Answer

The Answer of On December 31,2014,Luanne Inc.had outstanding 180,000 shares of common stock.Net income for 2014 was $285,000.Outstanding options (granted July 1,2014)to purchase 15,000 shares of common stock at $20 per share had not been exercised by December 31,2014.During 2014,market prices for Luanne's common stock were:
  
(1)Compute the basic earnings per common share in 2014.
(2)Compute the diluted earnings per common share in 2014.