At January 1, 2023, Trailblazers Corporation had 300,000 common shares outstanding (no preferred issued). On March 1, the corporation issued 500,000 new shares to raise additional capital. On July 1, the corporation purchased 100,000 shares from the market for it's stock option plan.  On October 1, the corporation purchased on the open market 180,000 of its own shares at $35 each and retired them.

Instructions
Calculate the weighted average number of common shares outstanding to be used in calculating earnings per share for 2023.

Throughout the calendar year 2023, Timberwolves Corporation has 400,000 common shares outstanding (no preferred shares issued). In addition, Timberwolves has $5,000,000 20-year, 7% bonds outstanding, issued at par in 2021. Each $1,000 bond is convertible into 20 common shares after June 30, 2024. Timberwolves reported net income of $600,000 for calendar 2023. Its income tax rate is 30%.

Instructions

Calculate the following for 2023:
a) Basic earnings per share
b) Diluted earnings per share
c) You are the VP Finance of Timberwolves and the CEO has asked you to explain why a company would want to calculate diluted EPS (DEPS). Explain the importance of DEPS and when it is used.