Colson Corp. had $800,000 net income in 2019.

On January 1, 2019, there were 205,000 shares of common stock outstanding.

The market price of the common stock averaged $50 during 2019.

The tax rate is 40%.

• During 2019, there were 40,000 shares of cumulative preferred stock outstanding. The preferred has a $100 par and a 3.5% dividend rate. Each preferred share may be converted into 4 shares of common stock.

• Colson issued $2,000,000 of 8% convertible bonds at face value during 2015. Each $1,000 bond is convertible into 30 shares of common stock. No bonds were converted during 2019.

• Throughout 2019, there were 30,000 options outstanding to buy common stock at $40 a share. No options were exercised in 2019.

Required: Determine the impact of each of the below on Diluted EPS.

For each potentially dilutive security,

• report the dollar amount by which the numerator will change, and
• report the number of shares by which the denominator will change.

The impact for Preferred stock is shown below as an example.

Numerator effect Denominator effect

Preferred stock _ + $140,000 __+ 160,000 shares_

1) 8% bonds _________________ ___________________

2) Options _________________ ___________________