Assignment
1. Net Income for the year $350,000
2. Capital Structure
a. Cumulative 8% preferred stock, $100 par, 7,000 shares issued and outstanding all year, convertible into 7,000 shares of common stock $700,000
b. $10 par common stock, 74,000 shares issued and outstanding on January 1, 2015. $740,000
On April 1, 2015, bought 400 shares of common stock as treasury shares at $62.
On October 1, 2015, sold 120 shares of treasury stock at $60.
On December 1, 2015, sold 60 treasury shares at $68.
c. Bowie issued 8% convertible bonds at face value during $2,000,000 2014. Each $1,000 bond is convertible into 30 shares of common stock.
d. Stock options: 90,000 options to purchase 90,000 shares, exercisable at the option price of $25 per share. Average market price per share of common stock during entire year $30
e. Income tax rate 30%
Compute of earnings per common share for 2015. You MUST support your answers with computations:
(a) Basic earnings per share
(b) Diluted earnings per share