Question: Computing Basic and Diluted EPS, Convertible Bonds Converted during the Year. Topher Company began the current year with 1,600,000 common shares outstanding. Topher also reported

Computing Basic and Diluted EPS, Convertible Bonds Converted during the Year. Topher Company began the current year with 1,600,000 common shares outstanding. Topher also reported $ 800,000 par value, 2% convertible bonds outstanding all year. The bonds were issued at par. The bonds can be converted to 800,000 shares of common stock. Topher made interest payments at the end of each quarter. The company is subject to a 40% effective tax rate and reported net income of $ 950,000 for the current year.
Required
a. What are basic and diluted EPS for Topher Company?
b. Assume the bonds were converted on October 1. What are basic and diluted EPS for Topher Company?

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a Basic EPS Net income is 950000 and there are no preferred dividend requirementsNo new shares are issued or repurchased during the year so the weight... View full answer

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