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On December 31, 2019, Cheap Cheapy had net income of $2,000,000. During the year Common Stock was outstanding as follows: (Jan 1, Beginning 600,000, Issued

On December 31, 2019, Cheap Cheapy had net income of $2,000,000. During the year Common Stock was outstanding as follows: (Jan 1, Beginning 600,000, Issued on July 1st, 400,000 and on November 1st issued 300,000). 8% $1,000,000 bonds were outstanding. The bonds had a denomination of $1,000 each convertible into 15 shares of common stock. No bonds were converted. Of the 200,000 shares of Preferred Stock outstanding on Jan 1st, 60% were converted on July 1st. Preferred Stock received dividends of .10 each on Dec. 31st. Find the following for Cheap Cheapy:

  1. The weighted-average number of shares used to calculate DEPS.
  2. The effects of the assumed conversions on the numerator of the DEPS
  3. The Earns per share DEPS

(DEPS NOT BEPS)

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