Cohvertble Preferred Stock, Convertble Bonds, and EPS Francis Company has 24,000 shares of commen sock tutstendmg at the boginning of 2016. Franod issued 3,000 addional shares en Nay 1 and 2,000 additional shares on September 30 , it also has two convertible securities outitanding at the end of 2016 . These are: 1. Canvertble praferted stock, 2,500 shares of B.5\%, 150 pac, preferred stock were issued on January 2, 2013, for \$60 per share. Eachs shere of preferred tock is convertible into 3 shares of common stocki Current sividends hye been dedared and paid. To date, no preferted stock has been serverted. 2. Coovertible bonds Bends wht s face value of $250,000 and an merest rate of 5,5% were iasued at par in 2015 , Eoch 11 . 000 bsnd is conveitible into 20 shares of camimon stecki To dote, no bonds have been converted. francs earned net income of 572,500 duritid 2016, The nsome tax rate is 30%. Required: 1. Compute the nomber of ahares of cormmon atock that francis should usn in calculating basc earningr per thare for 2016 . Weighted average shbres owhatanding: Lhares 2. Calculase basic esrings per ahare for 2ist 6. If tequred, fo.nd yeur ansaer to two dacimal places. Busc earhingt per thare: 3 x bilised aninngt ent athare: have th eolalate dlend tes for tha case. If reduires, fovin wour answee to two decimal places: Dasec earnetg pre shenrel 1 Pmesiapomanwespored frencit compst Convertible Preferred Stock, Coevert ble Bonds, and Eps Seprember 20 , it aise has two cockvertble securites outstanding at the end of 2016 . These are: corvertible inte 3 shares of common stock Current dividends have been dedared and pad. To date, ns prefered stsck has beeh cenverted. stock To date, he bands have been cetereted. Francs earned net income of $72,500 during 2016. The rcome tax rabe a 30\%. Required: 1. Compute the number of shates of common sack tha fronon should ise in colodating buse esining per share for 2016. Weighted average shares pustanding! shares Calculate basic earnings per share for 2016. If required, round your answer to two decimal places. Basic earnings per share: 5 x 3. Cslculate dituted earrings per thare for 2016 and the incremental FPS of the preferred stock and convertible bonds. if required, round your answers to tas decimal places. Duluted earnings per share! 1 x have to caloulate diluted Eces for this cals, If required, round vour anseer to two decimst plochs, Basit earning per share1 1 4b. Show how the basic EpS you calculated should be reported to shareholders. You do not have to calculate diluted Eps
