Ford Inc. has gathered the following information to be used in developing its Earnings Per Share presentation for the year ended December 31, YR08.

$100,000 of 8% convertible bonds are outstanding at 12-31-YR08. The bonds were issued at 98 on 6-1-YR06. These bonds are dated 6-1-YR06 and are to be outstanding for 10 years. Interest is payable each year on June 1 . Beginning on December 1, YR10 each $1,000 bond is convertible into common stock according to the following schedule. Note: As of 12-31-YR08 none of these bonds have been converted to common stock. Also, for the year ended 12-31-YR08 the company recorded $200 of discount amortization related to these bonds. $1 dollar par value common stock, 100,000 shares authorized, 24,000 shares issued, and 23,500 shares outstanding at 12-31-YR08. The company began the YR08 year with 10,000 shares outstanding. On 8-1-YR08 an additional 2,000 shares were issued for cash. On 10-1-YR08, the company declared a 2-for-1 stock split. Finally, on 12-1-YR08 the company purchased 500 shares to be held as treasury stock. A total of 2,000 stock options with an exercise price of $10 were outstanding at 12-31-YR08. Upon payment of $10, each option is convertible into one share of common stock. The options were originally issued on 10-1-YR08 and are exercisable between 10-1-YR08 and 12-31-YR14. Note: As of 12-31-YR08 none of these options have been converted to common stock. $100 par value, 5% preferred stock; 4,000 shares authorized with 1,000 shares issued and outstanding at 12-31-YR08. The preferred stock is cumulative but not participating, and was issued on 9-1-YR07. This issue of preferred stock is convertible into common stock at a rate of 6 common shares per one preferred share beginning on 1-1-YR08. Dividends were last declared and paid for the year ended 12-31-YR07. Dividends for YR08 have not been declared or paid. Selected average market prices for company securities were: the company reported a net income of $42,000. In YR 08 the income tax rate is 30%. A. Compute weighted average common shares outstanding for YR08 To avoid carryforward errors, for parts B - F assume your answer in part ' A ' above was 20,000 common shares. B. Compute simple earnings per share for YR08. C. For each convertible security, determine the EPS numerator and denominator effects to be used in calculating diluted EPS for YR08. D. Determine the order in which the convertible securities will enter into the computation of diluted EPS. E. Perform and complete the computations necessary to determine diluted earnings per share for YR08. F. State the EPS amount(s) that will be reported on the YR08 income statement (round to nearest penny)