During 2014, Stewart, Inc. had the following convertible securities outstanding:
A.$220,000 of 10%, $100 par, cumulative preferred stock. Each share is convertible into 5 shares of common stock.
B.$200,000 of 9.5% convertible bonds. Each $1,000 bond is convertible into 45 shares of common stock.
C.$100,000 of 8% convertible bonds. Each $1,000 bond is convertible into 32 shares of common stock.
D.$150,000 of 11%, $100 par, cumulative preferred stock. Each share is convertible into 5 shares of common stock.
Stewart, Inc. has an income tax rate of 40%. Its reported net income for 2014 was $88,000, and it had 22,000 shares of common stock outstanding all year.
Required:
Calculate basic and diluted earnings per share for Stewart.

Question

During 2014, Stewart, Inc. had the following convertible securities outstanding: 
A.$220,000 of 10%, $100 par, cumulative preferred stock. Each share is convertible into 5 shares of common stock.
B.$200,000 of 9.5% convertible bonds. Each $1,000 bond is convertible into 45 shares of common stock.
C.$100,000 of 8% convertible bonds. Each $1,000 bond is convertible into 32 shares of common stock.
D.$150,000 of 11%, $100 par, cumulative preferred stock. Each share is convertible into 5 shares of common stock.
Stewart, Inc. has an income tax rate of 40%. Its reported net income for 2014 was $88,000, and it had 22,000 shares of common stock outstanding all year.
Required:
Calculate basic and diluted earnings per share for Stewart.

Quizplus · Accepted Answer

The Answer of During 2014, Stewart, Inc. had the following convertible securities outstanding: 
A.$220,000 of 10%, $100 par, cumulative preferred stock. Each share is convertible into 5 shares of common stock.
B.$200,000 of 9.5% convertible bonds. Each $1,000 bond is convertible into 45 shares of common stock.
C.$100,000 of 8% convertible bonds. Each $1,000 bond is convertible into 32 shares of common stock.
D.$150,000 of 11%, $100 par, cumulative preferred stock. Each share is convertible into 5 shares of common stock.
Stewart, Inc. has an income tax rate of 40%. Its reported net income for 2014 was $88,000, and it had 22,000 shares of common stock outstanding all year.
Required:
Calculate basic and diluted earnings per share for Stewart.