Case Instructions English Corporation had $740,000 net income in 2025. On January 1, 2025, there were...

 

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Case Instructions English Corporation had $740,000 net income in 2025. On January 1, 2025, there were 300,000 shares of common stock outstanding. On July 1, 40,000 shares were issued and on October 1, English bought 60,000 shares of treasury stock. There are 15,000 options to buy common stock at $20 a share outstanding. The market price of the common stock averaged $30 during 2025. The tax rate is 30%. In 2025, there were 50,000 shares of convertible preferred stock outstanding. The $50 par preferred pays an annual dividend of $3.50/share and is convertible into 4 shares of common stock. English issued $5,000,000 of 6% convertible bonds at face value during 2024. Each $1,000 bond is convertible into 50 shares of common stock. Required a. Using the method outlined in the Chapter 15 case notes, prepare a detailed calculation of the weighted average common stock outstanding during 2025 for use in the basic EPS computation. b. Prepare a detailed calculation of 2025 basic earnings per share. Round EPS to 2 decimals. c. Using the method outlined in the Chapter 15 case notes, prepare a detailed calculation of diluted earnings per share for 2025. You must show the dilution test for each potentially dilutive security. Round EPS to 2 decimals. Case Instructions English Corporation had $740,000 net income in 2025. On January 1, 2025, there were 300,000 shares of common stock outstanding. On July 1, 40,000 shares were issued and on October 1, English bought 60,000 shares of treasury stock. There are 15,000 options to buy common stock at $20 a share outstanding. The market price of the common stock averaged $30 during 2025. The tax rate is 30%. In 2025, there were 50,000 shares of convertible preferred stock outstanding. The $50 par preferred pays an annual dividend of $3.50/share and is convertible into 4 shares of common stock. English issued $5,000,000 of 6% convertible bonds at face value during 2024. Each $1,000 bond is convertible into 50 shares of common stock. Required a. Using the method outlined in the Chapter 15 case notes, prepare a detailed calculation of the weighted average common stock outstanding during 2025 for use in the basic EPS computation. b. Prepare a detailed calculation of 2025 basic earnings per share. Round EPS to 2 decimals. c. Using the method outlined in the Chapter 15 case notes, prepare a detailed calculation of diluted earnings per share for 2025. You must show the dilution test for each potentially dilutive security. Round EPS to 2 decimals.