BRIEF EXERCISE 16-12

Net income................................................................................................................... $0

Adjustment for interest, net of tax [$0 X (0 .0)].................................................... 0

Adjusted net income................................................................................................... $0

Weighted average number of shares adjusted for

dilutive securities (0 + 0)......................................................................................... 0

Diluted EPS................................................................................................................. $.00

7 BE16-12 Rockland Corporation earned net income of $300,000 in 2012 and had 100,000 shares of common stock outstanding throughout the year. Also outstanding all year was $800,000 of 10% bonds, which are convertible into 16,000 shares of common. Rockland's tax rate is 40 percent. Compute Rockland's 2012 diluted earnings per share