Problem:

Seville, Inc. had 300,000 shares of common stock outstanding during all of 2022. Sevilles 2022 net income was $1,650,000 and the income tax rate was 25%. Common stock dividends of $2 per share were declared and paid during 2022.

During 2022, Seville, Inc. had $500,000 of 10% convertible bonds. The bonds were all issued during 2020. Each of the 500 $1,000 bonds is convertible into 25 shares of $1 par value common stock. As of December 31, 2022, none of the bonds had been converted. The company had no preferred stock or other convertible securities.

I need these 3 questions answered please

1. Compute basic and diluted earnings per share for 2022.

2. Assume that the 500 bonds were all converted to common stock on May 1, 2023. Record the journal entry for the conversion of the bonds.

3. Refer to the original problem data and part b. Assuming there was no other common stock activity in 2023, determine the weighted average common shares that would be used for computing earnings per share in 2022.