At December 31, 2010, Garrison Company Had 400 Shares of Common

question 30

Multiple Choice

At December 31, 2010, Garrison Company had 400 shares of common stock outstanding. On October 1, 2011, an additional 100 shares of common stock were issued. In addition, Garrison had $40,000 of 8 percent convertible bonds outstanding at December 31, 2011, which are convertible in 225 shares of common stock. No bonds were converted into common stock in 2011. Net income for the year ended December 31, 2011, was $14,000. Assuming an income tax rate of 50%, the basic earnings per share for the year ended December 31, 2011, would be

• A) $24.00
• B) $26.48
• C) $28.00
• D) $32.95

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