Problem 3. Blurash Corp. had the following stockholders' equity at December 31, 20X2: Preferred stock: $50 par, 6%, convertible, cumulative 20,000 shares authorized, 6,000 shares issued and outstanding $300,000 Paid-in capital in excess of par-Preferred i 80,000 Common stock: $5 par; 1,000,000 shares authorized, 100,000 shares issued and outstanding 500,000 Paid-in capital in excess of par-Common 300,000 Retained Earnings 720,000 Total Stockholders' Equity $2,000,000 Other information relating to Blurash Corp. is as follows: Blurash's net income for 20X2 was $600,000. The tax rate was 30%, No transactions affecting capital stock occurred during the year. (Therefore, you don't have to calculate weighted average number of shares for Basic EPS!) Blurash had $1,000,000 of 6% convertible bonds payable. Each $1,000 bond is convertible into 20 shares of common stock. The bonds were issued several years ago. Each share of preferred stock is convertible into 10 shares of common stock (No change during the year.) 10,000 stock options were outstanding all year, each for 2 shares of common stock at an option price of $15. The average price of the common stock during 20X0 was $25. Required: Calculate a) basic earnings per share; and b) prepare a schedule to calculate diluted earnings per share. Show all calculations. (A work area is provided on the next page.) Label your work, so it explains what you are doing in your calculations. A work sheet is provided on the next page which a) Basic earnings per share is to be used for the supporting calculations for each of the potentially dilutive securities that you b) Diluted earnings per share include in the schedule below. Problem 3. Blurash Corp. had the following stockholders' equity at December 31, 20X2: Preferred stock: $50 par, 6%, convertible, cumulative 20,000 shares authorized, 6,000 shares issued and outstanding $300,000 Paid-in capital in excess of par-Preferred i 80,000 Common stock: $5 par; 1,000,000 shares authorized, 100,000 shares issued and outstanding 500,000 Paid-in capital in excess of par-Common 300,000 Retained Earnings 720,000 Total Stockholders' Equity $2,000,000 Other information relating to Blurash Corp. is as follows: Blurash's net income for 20X2 was $600,000. The tax rate was 30%, No transactions affecting capital stock occurred during the year. (Therefore, you don't have to calculate weighted average number of shares for Basic EPS!) Blurash had $1,000,000 of 6% convertible bonds payable. Each $1,000 bond is convertible into 20 shares of common stock. The bonds were issued several years ago. Each share of preferred stock is convertible into 10 shares of common stock (No change during the year.) 10,000 stock options were outstanding all year, each for 2 shares of common stock at an option price of $15. The average price of the common stock during 20X0 was $25. Required: Calculate a) basic earnings per share; and b) prepare a schedule to calculate diluted earnings per share. Show all calculations. (A work area is provided on the next page.) Label your work, so it explains what you are doing in your calculations. A work sheet is provided on the next page which a) Basic earnings per share is to be used for the supporting calculations for each of the potentially dilutive securities that you b) Diluted earnings per share include in the schedule below