On January 1, 2020, Pearl Industries had stock outstanding as follows.

6% Cumulative preferred stock, $100par value,issued and outstanding9,500shares $950,000

Common stock, $10par value, issued and outstanding202,000shares 2,020,000

To acquire the net assets of three smaller companies, Pearl authorized the issuance of an additional166,800common shares. The acquisitions took place as shown below.

Date of AcquisitionShares Issued

Company A April 1, 202052,800

Company B July 1, 202082,800

Company C October 1, 202031,200

On May 14, 2020, Pearl realized a $94,800(before taxes) insurance gain on discontinued operations. On December 31, 2020, Pearl recorded income of $306,000from continuing operations (after tax).

Assuming a20% tax rate, compute the earnings per share data that should appear on the financial statements of Pearl Industries as of December 31, 2020.

Show Pearl Industries Income Statement: (3 entries)

Account TitlesTotals

(a)

(b)

(c)

The information below pertains to Indigo Company for 2021.

Net income for the year:$1,260,000

7% convertible bonds issued at par ($1,000per bond); each bond is convertible into

30shares of common stock:2,080,000

6% convertible, cumulative preferred stock, $100par value; each share is convertible

into3shares of common stock:3,950,000

Common stock, $10 par value:6,270,000

Tax rate for 2021:20%

Average market price of common stock:$25per share

There were no changes during 2021 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase81,900shares of common stock at $20per share.

(a) Compute basic earnings per share for 2021.(round answer to two decimal points)

(b) Compute diluted earnings per share for 2021. (round answer to two decimal points)