Harris Kellys is in existence for the past fifteen years.However, during recent years, its common shares outstanding changed as below.Harris Kellys accounting year ends on December 31st.

2018 20172016

Shares outstanding, January 1st 300,000240,000200,000

Shares sold, April 1, 201640,000

25% stock dividend, July 1st 201760,000

2-for-1 stock split, July 1st 2018 300,000

Shares sold, October 1st 2018100,000

Shares outstanding, December 31st700,000300,000240,000

Net Income$ 750,000660,000 598,000

Required:

• Determine the weighted average number of shares outstanding for each of the years above. (3 Marks)
• Assuming there were no preferred shares outstanding, compute EPS for each year based on the computation of years in part 1. (3 Marks)
• Assume instead that Harris Kellys Corporation has 800,000 common shares outstanding throughout 2018. In addition, the corporation has 10,000, 20-year, 7% bonds issued at par in 2016. Each $1,000 bond is convertible into twenty (20) common shares after 9/23/19. During the year 2018, the corporation earned $1,200,000 after deducting all expenses. The tax rate was 30%.Calculate the basic and fully diluted earnings per share for 2018