Treasury Stock Methods: Diluted Earnings Per ShareSimpson Corporation computed its diluted earnings per share
for the year ended September 30. 20X2. The company had 200, 000 shares
outstanding at the beginning of the year, issued 60,000 shares at April1 X2,
and reacquired 2,000 shares to be held in its treasury on July 1, 20X2.The company also has 2,000 options outstanding exercisable
at $40 per share. The average market price of Simpson’s shares during the year
was $50. The common stock equivalents added to the company’s weighted average
shares outstanding used for basic earnings per share was computed using the
treasury stock methods.
How many additional shares would Simpson include in its
diluted earnings per share calculations?
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