Archangelo Company provided the following information for the current year. Net income is $ 8,112,600 and the company is subject to a 40% tax rate. There are 1,020,300 shares of common stock outstanding for the entire year with an average market price of $ 32 per share. The company had three potentially dilutive securities outstanding for the full year. There are qualified employee options to acquire 98,000 shares of common stock at an exercise price of $ 20 per share. The stockholders’ equity section of the balance sheet includes 85,200 shares of convertible preferred stock. The board of directors declared preferred dividends of $ 6.50 per share for the year. Each preferred share is convertible into 1 share of common stock. Finally, the company issued $ 6,500,000 face value, 9% convertible bonds at par value on January 1. Each $ 1,000 par value bond is convertible into 80 shares of common stock.
Required
a. Based on the information provided, compute basic and diluted earnings per share for the current year. Include all computations related to the application of antidilution sequencing.
b. Prepare the required income statement disclosures beginning with net income.