Question
Information from the financial statements of Ames Fabricators, Inc., included the following: December 31 2018 2017 Common shares 100,000 100,000 Convertible preferred shares (convertible into
Information from the financial statements of Ames Fabricators, Inc., included the following:
| December 31 | |||||
|
| 2018 |
|
| 2017 |
|
Common shares |
| 100,000 |
|
| 100,000 |
|
Convertible preferred shares (convertible into 62,000 shares of common) |
| 30,000 |
|
| 30,000 |
|
10% convertible bonds (convertible into 20,000 shares of common) | $ | 1,000,000 |
| $ | 1,000,000 |
|
Amess net income for the year ended December 31, 2018, is $800,000. The income tax rate is 40%. Ames paid dividends of $5 per share on its preferred stock during 2018. Required:
Compute basic and diluted earnings per share for the year ended December 31, 2018. (Enter your answers in thousands.)
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