1.Determine if the bonds are dilutive.

2.Determine if the options are dilutive and calculate incremental shares.

2. Assume that the following data relative to Kane Company for 2018 is available: Net Income (Tax rate of 30%) No dividends were declared in 2018 $2,900,000 Transactions in Common Shares Jan. 1, 2018, Beginning number Feb. 1, 2018, Purchase of treasury shares June 1, 2018, Stock split 2-1 Oct. 1, 2018, Issuance of shares Cumulative 900,000 820,000 1,640,000 1,740,000 Change (80,000) 820,000 100,000 % Cumulative Convertible Preferred St Sold at par, convertible into 200,000 shares of common (adjusted for split) $1,200,000 tio Exercisable at the option price of $30 per share. Average market price in 2018, S33 (market price and option price adjusted for split) 50,000 shares Ve on On March 1, 2018, issued 15 year, $800,000, 10%, bonds at par. Face value $1,000 per bond. Each bond can be converted into 90 shares of common stock. (adjusted for split) 2. Assume that the following data relative to Kane Company for 2018 is available: Net Income (Tax rate of 30%) No dividends were declared in 2018 $2,900,000 Transactions in Common Shares Jan. 1, 2018, Beginning number Feb. 1, 2018, Purchase of treasury shares June 1, 2018, Stock split 2-1 Oct. 1, 2018, Issuance of shares Cumulative 900,000 820,000 1,640,000 1,740,000 Change (80,000) 820,000 100,000 % Cumulative Convertible Preferred St Sold at par, convertible into 200,000 shares of common (adjusted for split) $1,200,000 tio Exercisable at the option price of $30 per share. Average market price in 2018, S33 (market price and option price adjusted for split) 50,000 shares Ve on On March 1, 2018, issued 15 year, $800,000, 10%, bonds at par. Face value $1,000 per bond. Each bond can be converted into 90 shares of common stock. (adjusted for split)