At the beginning of 2020 INC Industries had 27,000 shares of common stock issued and outstanding and 500 $1,000, 6% bonds (issued at par)each convertible into 10 shares of common stock. During 2020, INC had revenues of $141,000 and expenses other than interest and taxes of $101,000 . Assume that the tax rate is 40% None of the bonds was converted or redeemed

1. Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. 2.55.)

2. (b) Assume the same facts as those assumed for part (a), except that the 500 bonds were issued on September 1, 2020 (rather than in a prior year), and none have been converted or redeemed Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, 2.55)

3

(c) Assume the same facts as assumed for part (a ), except that 100 of the 500 bonds were actually converted on July 1, 2020. Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, eg 2.55 )

At the beginning of 2020. INC Industries had 27000 shares of common stock issued and outstanding and 500 $1,000, 6% bonds (issued at par), each convertible into 10 shares of common stock During 2020, INC had revenues of $141,000 and expenses other than interest and taxes of $101,000. Assume that the tax rate is 40%None of the bonds was converted or redeemed