Lakeshore Gelato has $21,600$ shares of common stock outstanding at the beginning of $20$Y$5.$ Lakeshore Gelato issued $2,700$ additional shares on May $1$ and $1,800$ additional shares on September $30.$ It also has two convertible securities outstanding at the end of $20$Y$5.$

$1.$ Convertible preferred stock: $2,250$ shares of $8\mathrm{.}0\%,$ $$50$ par, preferred stock were issued on January $2,20$Y$2,$ for $$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.

$2.$ Convertible bonds: Bonds with a face value of $$225,000$ and an interest rate of $5\mathrm{.}0\%$ were issued at par in $20$Y$4.$ Each $$1,000$ bond is convertible into $20$ shares of common stock. To date, no bonds have been converted.

$3.$ Lakeshore Gelato earned net income of $$72,500$ during $20$Y$5.$ The income tax rate is $30\%.$

REQUIRED

$1.$ Compute the Basic Earnings Per Share for $20$Y$5.$

$2.$ Compute the Diluted Earnings Per Share $20$Y$5.$

Answer rating: 100% (QA)

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