The information below pertains to Headland Company for 2021. Net income for the year $1,180,000 7%...

Transcribed Image Text:

The information below pertains to Headland Company for 2021. Net income for the year $1,180,000 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 1,920,000 7% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,050,000 Common stock, $10 par value 5,790,000 Tax rate for 2021 20% Average market price of common stock $25 per share There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 73,600 shares of common stock at $20 per share. (a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.) Basic earnings per share $ (b) Compute diluted earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $ The information below pertains to Headland Company for 2021. Net income for the year $1,180,000 7% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 30 shares of common stock 1,920,000 7% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock 4,050,000 Common stock, $10 par value 5,790,000 Tax rate for 2021 20% Average market price of common stock $25 per share There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 73,600 shares of common stock at $20 per share. (a) Compute basic earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.) Basic earnings per share $ (b) Compute diluted earnings per share for 2021. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $

Answer rating: 100% (QA)

1Basic EPS is computed as BEPSNet IncomePreferred DividendWeighted average noof equity shares BEPS1180000229200585000 BEPS950800585000 BEPS163 working note Preferred dividend38200006229200 Weighted average no ... View the full answer