The Johnson Company lists the following stockholders equity items on 12/31/17:

8% Preferred Stock, $100 par, 50,000 shares authorized,

10,000 shares issued $1,000,000

Common Stock, $10 par, 500,000 shares authorized,

205,625 shares issued 2,056,250

Paid-in Capital in excess of par - Preferred 500,000

Paid-in Capital in excess of par - Common 829,500

Paid-in Capital - Treasury Stock Transactions 15,000

Paid-in Capital - Stock Options 20,000

Retained Earnings 947,855

Less: Treasury stock (2,000 shares at cost) (34,000)

Total Stockholders Equity $5,334,605

The following information is also available:

(1) Net income for 2017 was $441,820. Net income includes a $50,000 gain (before taxes) on the disposal of the assets of a discontinued operation.

(2) The market price of the common stock at 12/31/17 is $24.50 per share, and the market price of the preferred stock is $105. The average price of the common stock during 2017 was $23.52.

(3) Johnsons income tax rate for 2017 is 30%.

(4) There was no change in the number of common shares outstanding for 2017.

(5) On 1/1/17, Johnson established a stock option plan for certain key executives. Five executives were each given the right to purchase 2,000 shares of Johnson common stock at a price of $18. The market price of the common stock on the date of grant was $20.00 and the market value of the options is $4. The options may be exercised any time after 1/1/17, and the executives must be in Johnsons employ at the time of exercise. The service period is considered to be two years.

(6) Johnsons preferred stock is cumulative and convertible. Each share of preferred stock is convertible into 4 shares of common stock.

(7) In addition to the dilutive equity securities discussed above, Johnson had two issues of convertible bonds outstanding for the period:

(a) Johnson had $1,000,000 of 8% convertible bonds. Bond interest expense each year is reduced by $500 amortization of the premium. Each $1,000 bond is convertible into 30 shares of common stock.

(b) Johnson also had $1,500,000 of 9% convertible bonds. The bonds were issued at par. Each $1,000 bond is convertible into 40 shares of common stock.

Required:

a) Compute Johnsons earnings per share for 2017.

b) Show the income statement presentation of Johnsons earnings per share.

c) Prepare the required disclosure for earnings per share, as it might appear in Johnsons annual report.