A Company Earned $20,000 in 2014 and Had 20,000 Shares

question 45

Multiple Choice

A company earned $20,000 in 2014 and had 20,000 shares of common stock outstanding the entire year.The following four potentially dilutive securities were also outstanding for the entire year.The numerator and denominator effects of the issues are as indicated: What is diluted EPS?

• A) $0.49
• B) $0.32
• C) $1.00
• D) $0.81

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Definitions:

Accounts Payable

The amount a company owes to suppliers for items or services purchased on credit.

Liabilities

Obligations in terms of finances that an organization must fulfill to external parties, involving the exchange of economic advantages like funds, goods, or assistance over time.

Accounts Receivable

Money owed to a company by its customers for goods or services provided on credit.

Capital

Represents the amount of funds provided by owners or investors to support business operations.