Donald Corporation had 7 million shares of common stock outstanding during the current calendar year. It issued

ten thousand $1,000, convertible bonds on January 1. Each bond is convertible into 50 shares of common stock. The bonds were issued at face amount and pay interest semiannually at an annual rate of 10%. On June 30, Ignatius issued 100,000 shares of $100 par 6% cumulative preferred stock. Dividends are declared and paid quarterly. Ignatius has an effective tax rate of 25%. Ignatius would report the following EPS data (rounded) on its net income of $20 million:

	Basic EPS			Diluted EPS
a.	$	2.77		$	2.67
b.	$	2.81		$	2.73
c.	$	2.85		$	2.67
d.	$	2.81		$	2.68

A. Option A

B. Option B

C. Option C

D. Option D

Barron Company granted 8 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of $3 per share on January 1, 2021, the grant date. When calculating diluted EPS at December 31, 2022, what will be the net increase in the denominator of the EPS fraction if the market price of the common shares averaged $4 per share during 2022?

A. 6 million

B. 2.67 million

C. 2 million

D. 8 million

Beall, Inc. has a defined-benefit pension plan covering its 50 employees. Beall agrees to amend its pension benefits. As a result, the projected benefit obligation increased by $2,700,000. Beall determined that all its employees are expected to receive benefits under the plan over the next 5 years. In addition, 10 employees are expected to retire or quit each year. Assuming that Beall uses the years-of-service method of amortization for prior service cost, the amount reported as amortization of prior service cost in year one after the amendment is

a. $900,000.

b. $540,000.

c. $270,000.

d. $720,000.