Computing EPS with Multiple Potentially Dilutive Securities

Spencer Inc.'s 2020 earnings of $500,000 reflect a tax rate of 25%. During the year, Spencer had the following securities outstanding:

120,000 shares of common stock.

5,000 shares of 6%, $100 par, nonconvertible, cumulative preferred stock.

5,000 shares of 6%, $100 par, cumulative preferred stock, each convertible into 1.75 shares of common stock.

500 bonds, $1,000 face value, 8% interest, each convertible into 30 shares of common stock (issued at face value).

200 bonds, $1,000 face value, 6% interest, each convertible into 20 shares of common stock (issued at face value).

Required

a. Compute basic EPS.

b. Compute diluted EPS.

Note: Round earnings per share amounts to two decimal places.

	Net Income Available to Common Stockholders	Weighted Avg. Common Shares Outstanding	Per Share
Basic EPS	Answer	Answer	Answer
Diluted EPS	Answer	Answer	Answer