Question

Nolte Co. has 4,500,000 shares of common stock outstanding on December 31, 2014. An additional 200,000 shares are issued on April 1, 2015, and 480,000 more on September 1. On October 1, Nolte issued $6,000,000 of 9% convertible bonds. Each $1,000 bond is convertible into 40 shares of common stock. No bonds have been converted. The number of shares to be used in computing basic earnings per share and diluted earnings per share on December 31, 2015 is$1,000$1,300$1,600None of the above

Answer 1

Number of shares to be used is 5,180,000 shares

Step-by-step explanation:

The options provided in the question are in Dollars yet we need a number so the options are not for this question making them incorrect for the question.

4,500,000+200,000+480,000 =5,180,000 Number of outstanding shares

diluted EPS will of course take into account the effect of the bond.