Northwest Stamping began the current year with $300,000$ common shares outstanding and issued an additional $360,000$ shares on September $1.$ The

firm has $$11,500,000,3\mathrm{.}5\%$ convertible bonds outstanding for a full year $($i$.$e$.,$ $$402,500$ coupon interest per year$),$ which are convertible into $315,000$

shares of common stock. The firm issued the bonds at par and did not convert any during the current year. It also had $$1,220,000$ par value, $4\%$

nonconvertible, noncumulative preferred stock outstanding for the full year and declared dividends for the current year. The company is subject to a

$30\%$ tax rate and net income is $$3,900,000.$ Assume that the $$3,900,000$ net income reported by Northwest Stamping includes a $$786,000$ loss from

discontinued operations, net of tax.

Read the requirements.

Requiremen

Begin with th

Basic EPS fr

Requirements

a$.$ Based on this information, compute basic and diluted earnings per share for

the current year.

b$.$ Prepare the earnings per share disclosure on the income statement beginning

with income from continuing operations.