Calculate poland basic and diluted earnings per share

Problem 1: Northern Corporation purchased a fixed asset for \$20 million. At 12-31-08, the carrying value of the asset was \$17 million and its tax basis was \$12 million. On 12-31-09, the carrying value was \$16 million and the tax basis was \$9 million. Northern also reported \$2 million in unearned income, \$3 in prepaid expenses, and \$1 million in municipal bond interest . Northern's 2009 pretax financial income was \$25 million. Northern is subject to a 20% tax rate. (a) Calculate Northern's 2009 taxable income. (b) Prepare the journal entry to record Northern's tax expense for 09. (c) Calculate Northern's net after tax income for 09.

Problem 2: Poland Corporation had 200,000 shares of common stock outstanding on January 1, 2009. On September 30, 2009, Poland sold 50,000 shares of common stock for cash. Poland also had 10,000 shares of 2%, \$100 par value convertible prefered stock outstanding throughout 2009. Each share of preferred stock is convertible into three shares of common. Additionally, Poland had \$500,000 of 8% convertible bonds outstanding throughout the year. Each \$1,000 bond is convertible into 30 shares of common stock. Poland reported net after tax income of \$600,000 for 2009 and was subject to a 40% tax rate. Poland paid dividends to all common and preferred stock shareholders during the year. Calculate Poland's basic and diluted earnings per share for 2009.

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