Francis Company has 28,800 shares of common stock outstanding at the beginning of 2013. Francis issued 3,600 additional shares on May 1 and 2,400 additional shares on September 30. It also has two convertible securities outstanding at the end of 2013. These are:

Convertible preferred stock: 3,000 shares of 8.0%, $50 par, preferred stock were issued on January 2, 2010, for $60 per share. Each share of preferred stock is convertible into 2 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted.

Convertible bonds: Bonds with a face value of $300,000 and an interest rate of 5.0% were issued at par in 2012. Each $1,000 bond is convertible into 25 shares of common stock. To date, no bonds have been converted.

Francis earned net income of $84,000 during 2013. The income tax rate is 30%.

Required:

4a. Assume the same facts as above except that net income included a loss from discontinued operations of $12,000 net of income taxes. Compute basic EPS. You do not have to calculate diluted EPS for this case. If required, round your answer to the nearest cent.

4b. Show how the basic EPS you calculated should be reported to shareholders. You do not have to calculate diluted EPS.

Income from continuing operations: ___________

Loss from discontinuing operations: (____________)

Net income: ____________

Answer rating: 100% (QA)

Answer 4a Basic Earning per share 75600 Net Income afte... View the full answer