26. 27. 28. When computing diluted earnings per share, convertible bonds are: a) Ignored. b) Assumed converted whether they are dilutive or antidilutive. c) Assumed converted only if they are antidilutive. d) Assumed converted only if they are dilutive. Strauch Co. has one class of common stock outstanding and no other securities that are potentially convertible into common stock. During 2014, 100,000 shares of common stock were outstanding. In 2015, two distributions of additional common shares occurred: On April 1, 20,000 shares of treasury stock were sold, and on July 1, a 2for1 stock split was issued. Net income was $410,000 in 2015 and $350,000 in 2014. What amounts should Strauch report as earnings per share in its 2015 and 2014 comparative income statements issued early in 2016? 2% m a) $1.78 $3.50 b) $1.78 $1.75 0) $2.34 $1.75 d) $2.34 $3.50 e) $1.52 $2.05 At December 31, 2003, Olsen Company had 600,000 shares of common stock outstanding. On October 1, 2004, an additional 120,000 shares of common stock were issued. In addition, Olsen had $5,000,000 of 6% convertible bonds outstanding at December 31, 2003, which are convertible into 270,000 shares of common stock. No bonds were converted into common stock in 2004. The net income for the year ended December 31, 2004, was $1,500,000. Assuming the income tax rate was 30%, the diluted earnings per share for the year ended December 31, 2004, should be (rounded to the nearest penny): a) $2.72 b) $2.00 0) $1.90 d) $1.67 e) $1.73