Foyle, Inc., had 830,000 shares of common stock issued and outstanding at December 31, 2020. On July 1, 2021, an additional 40,000 shares of common stock were issued for cash. Foyle also had unexercised stock options to purchase 32,000 shares of common stock at $15 per share outstanding at the beginning and end of 2021. The average market price of Foyle's common stock was $20 during 2021. What is the number of shares that should be used in computing diluted earnings per share for the year ended

$858,000

Explanation:

Calculation for What is the number of shares that should be used in computing diluted earnings per share for the year ended

Number of shares=830,000 + (40,000 × 6/12) + [32,000 – (32,000 × ($15 ÷ $20)]

Number of shares=830,000 + 20,000+ [32,000 – (32,000 × 0.75)]

Number of shares=830,000 + 20,000+ [32,000 – 24,000]

Number of shares=830,000 + 20,000+ 8,000

Number of shares= 858,000

Therefore the number of shares that should be used in computing diluted earnings per share for the year ended will be 858,000

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