During 2009, Quattro Entered into the Following Transactions Relating to Shareholders

question 117

Essay

During 2009, Quattro entered into the following transactions relating to shareholders' equity. The corporation was authorized to issue 20 million common shares, $1 par per share.
Required:
Compute basic and diluted EPS for 2009.
Net income for 2009 was $\$ 110$ million.
Jan. 2: $\quad$ Issued 10 million common shares for cash.
Jan. 3: $\quad$ Entered an agreement with the company president to issue up to 2 million additional
$\quad$$\quad$$\quad$ shares of common stock in 2009 based on the earnings of Quattro in 2009. If net
$\quad$$\quad$$\quad$ income exceeds $\$ 100$ million, the president will receive 1 million shares; 2 million
$\quad$$\quad$$\quad$ shares if net income exceeds $\$ 120$ million.

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Definitions:

Deadweight Loss

A societal expense caused by disruptions in the marketplace, happening when there's a discrepancy between supply and demand levels.

Free-Trade Policy

A policy to eliminate import/export restrictions or tariffs among countries, facilitating a more free flow of goods and services across borders.

Exporting Steel

The process of producing steel in one country and selling it to buyers in another country.

Importing Incense

The process of bringing incense from foreign countries into one's own country for use, resale, or distribution.