Stockholders' equity 6% cumulative, convertible preferred stock, par value $100, 100,000 shares authorized, 20,000 shares issued...

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Stockholders' equity 6% cumulative, convertible preferred stock, par value $100, 100,000 shares authorized, 20,000 shares issued and outstanding Common stock, par value $1, 5,000,000 shares authorized, 550,000 shares issued and outstanding Additional paid-in capital $2,000,000 550,000 2,200,000 Retained earnings Total stockholders' equity Notes and Assumptions December 31, 2023: 1. Options were granted in July 2022 to purchase 50,000 shares of common stock at $20.00 per share. The average market price of common stock during 2023 was $25.00 per share. All options are still outstanding at the end of 2023. 2. Both the 8% and 10% convertible bonds were issued in 2022 at face value. Each convertible bond is convertible into 40 shares of common stock. (Each bond has a face value of $1,000). 3. The 6% cumulative, convertible preferred stock was issued at the beginning of 2022 at par. Each share of preferred is convertible into 2 shares of common stock. 4. The average income tax rate is 20 percent. 5. 550,000 shares of common stock were outstanding during the entire year. 10,050,000 $14,800,000 6. Preferred dividends were declared in 2023. 7. Net income was $1,550,000 in 2023. 8. No bonds or preferred stock were converted during 2023. Following the tables below to compute the Basic EPS and Diluted EPS. 1 Basic EPS 2 Diluted Earnings Per Share Step 1: Per share effect for each dilutive security Per share effect of Options Per share effect of 8% bonds Per share effect of 10% bonds Per share effect of 6% convertible preferred stocks Step 2: Rank of per share effects from smallest to largest (name of the security) Numerator Denominator Basic EPS Incremental Numerator Effect Incremental Denominator Effect Per Share Effect Step 3: Calculating diluted earnings per share Per share effect of Options Per share effect of 8% bonds Per share effect of 10% bonds Per share effect of 6% convertible preferred stocks Diluted earnings per share All answers should be filled as following format examples: Numerator (Dollar): $10,000 (include dollar sign, comma, no decimal point) Denominator (Number of shares): 5,000 (include comma, no decimal point) Earnings per share effect: $0.00 or $1.00 (include dollar sign, 2 decimal places) Total Numerator Total Denominator Recomputed EPS Stockholders' equity 6% cumulative, convertible preferred stock, par value $100, 100,000 shares authorized, 20,000 shares issued and outstanding Common stock, par value $1, 5,000,000 shares authorized, 550,000 shares issued and outstanding Additional paid-in capital $2,000,000 550,000 2,200,000 Retained earnings Total stockholders' equity Notes and Assumptions December 31, 2023: 1. Options were granted in July 2022 to purchase 50,000 shares of common stock at $20.00 per share. The average market price of common stock during 2023 was $25.00 per share. All options are still outstanding at the end of 2023. 2. Both the 8% and 10% convertible bonds were issued in 2022 at face value. Each convertible bond is convertible into 40 shares of common stock. (Each bond has a face value of $1,000). 3. The 6% cumulative, convertible preferred stock was issued at the beginning of 2022 at par. Each share of preferred is convertible into 2 shares of common stock. 4. The average income tax rate is 20 percent. 5. 550,000 shares of common stock were outstanding during the entire year. 10,050,000 $14,800,000 6. Preferred dividends were declared in 2023. 7. Net income was $1,550,000 in 2023. 8. No bonds or preferred stock were converted during 2023. Following the tables below to compute the Basic EPS and Diluted EPS. 1 Basic EPS 2 Diluted Earnings Per Share Step 1: Per share effect for each dilutive security Per share effect of Options Per share effect of 8% bonds Per share effect of 10% bonds Per share effect of 6% convertible preferred stocks Step 2: Rank of per share effects from smallest to largest (name of the security) Numerator Denominator Basic EPS Incremental Numerator Effect Incremental Denominator Effect Per Share Effect Step 3: Calculating diluted earnings per share Per share effect of Options Per share effect of 8% bonds Per share effect of 10% bonds Per share effect of 6% convertible preferred stocks Diluted earnings per share All answers should be filled as following format examples: Numerator (Dollar): $10,000 (include dollar sign, comma, no decimal point) Denominator (Number of shares): 5,000 (include comma, no decimal point) Earnings per share effect: $0.00 or $1.00 (include dollar sign, 2 decimal places) Total Numerator Total Denominator Recomputed EPS