1. Net income sh.280,000

2. Capital structure:

a. Convertible 6% bonds. Each of the 300, sh.1, 000 bonds is convertible

Into 50 ordinary shares at the present date and for the next

10 years. 300,000

b. sh.10 par, 200,000 ordinary shares issued and outstanding

during the entire year. 2,000,000

c. Share warrants outstanding to buy 16,000 ordinary shares

at sh.20 per share.

3. Other information:

a. Bonds converted during the year None

b. Income tax rate 30%

c. Convertible debt was outstanding the entire year

d. Average market price per share of common stock during the year sh.32

e. Warrants were outstanding the entire year

f. Warrants exercised during the year None

Required

Compute basic and diluted earnings per share.

Hint: The following format is recommended for workings/computation

Net Adjust- Adjusted Adjust- AdjustedDiluted

Security Income ment Net Income Shares ment Shares EPS

Ord. Shares sh.280, 000

Warrants

Conv. Bonds