a)

On December 31, 2008, Albacore Company had 300,000 shares of common stock issued and outstanding. Albacore issued a 8% stock dividend on June 30, 2009. On September 30, 2009, 10,000 shares of common stock were reacquired as treasury stock. What is the appropriate number of shares to be used in the basic earnings per share computation for 2009?

Question 1 options:

	324,000.
	310,800.
	321,500.
	326,500.

b)

During the current year, East Corporation had 2 million shares of common stock outstanding. Two thousand, $1,000, 8% convertible bonds were issued at face amount at the beginning of the year. East reported net income of $1.8 million for the year. Each bond is convertible into 100 shares of common stock. Tax rate is 40%. What is diluted EPS?

Question 5 options:

	$.95
	$.86
	$.90
	$.94