Francis company has 21,600 shares of common stock outstanding at the beginning of 2013. Francis issued 2,700 additional shares on may 1 and 1,800 additional shares on September 30. It also has been two convertible securities outstanding at the end of 2013. These are: 1. Convertible preferred stock: 2,250 shares of 8.0%, $50 par, preferred stock were issued on January 2, 2010, for $60 per share. Each of preferred stock is convertible into 3 shares of common stock. current dividends has been declared and paid. To date, no preferred stock has been converted. 2. Convertible bonds: bonds with a face value of $225,000 and an interest rate of 6.0% were issued at par in 2012. Each $1,000 bond is convertible into 25 shares of common stock. To date, no bonds have been converted.

Francis earned net income of $75,000 during 2013. The income tax rate is 30%.

Required:

1. compute the number of shares of common stock that Francis should use in calculating basic earnings pet share for 2013.

Weighted average shares outstanding= --------- shares

2. calculate basis earnings per share for 2013. If required, round your answer to the nearest cent.

Basic earnings per share=$-------

3. Calculate diluted earnings per share for 2013 and the incremental EPS of the preferred stock and convertible bonds. If required, round your answer to the nearest cent.

incremental EPS:

Bonds=$------- preferred =$-------

4. Assume the same facts as above except that net income included a loss from discounted operations of $12,900 net of income taxes. compute basis EPS. You do not have to calculate diluted EPS for this case. If required, round your answer to the nearest cent.

Basic EPS=$--------

4b. show how the basic EPS you calculated should be reported to shareholders. you do not have to calculate diluted EPS