14. On January 1, Abrat Star Inc. had 614,000 common shares outstanding. The company issued an additional 168,000 shares on March 1. Abrat Star also issued $1,400,000 par value, 3% nonconvertible, noncumulative preferred stock on October 1 and declared dividends for the current quarter. On April 30, the firm issued $5,110,000, 9% convertible bonds outstanding (i.e., $459,900 coupon interest per year) that are convertible into 108,000 shares of common stock. The firm issued all bonds at par and did not convert any during the current year. The company is subject to a 30% effective tax rate and net income is $5,700,000. Requirement Based on this information, compute basic and diluted earnings per share for the current year. Calculate the basic earnings per share (EPS) for the current year. (Round any intermediary computations to the nearest whole number, but then round the EPS to the nearest cent, $X.XX.) Basic EPS for the current year is $ Calculate the diluted EPS for the current year. (Round any intermediary computations to the nearest whole number, but then round the EPS to the nearest cent, $X.XX.) Diluted EPS for the current year is $ 15. You are computing annual earnings per share and required disclosures for Frank Fencing based on company provided information. Net income is $4,540,000. The weighted average number of shares is 2,790,000 shares. The year-end balance of outstanding shares is also 2,790,000 shares. There are options outstanding all year to acquire 1,196,250 shares of common stock at $24 per share. The average price of the company's common stock is $33 per share. The firm has 93,000 shares of $45 par value nonconvertible, noncumulative preferred stock outstanding as of the beginning of the year. The dividend rate is $1.70 per share. The board of directors declared the annual dividend. The company is subject to a 30% tax rate. Read the requirements Requirement a. Based on this information, compute basic and diluted earnings per share (EPS) for the current year. Begin with the basic earnings per share for the current year. (Round the EPS to the nearest cent, $X.XX.) Basic EPS for the current year is $ Calculate the diluted earnings per share for the current year. (Round the EPS to the nearest cent, $X.XX.) Diluted EPS for the current year is $ Requirement b. Prepare the earnings per share disclosure on the income statement beginning with net income. (Complete all answer boxes. Round all EPS amounts to the nearest cent, $X.XX.) Frank Company EPS Disclosure Income Statement (Partial) For the Current Year Net income Basic Earnings per Common Share Diluted Earnings per Common Share 1: Definition a. Based on this information, compute basic and diluted earnings per share for the current year. b. Prepare the earnings per share disclosure on the income statement beginning with net income
