1. Series A convertible bonds, $200,000 outstanding, 8% interest payable annually. Each 1,000 bond is convertible into 30 shares of common stock. The bonds were issued at par on September 1, 2020. 2. Series B convertible bonds, $500,000 outstanding, 10% interest payable annually. Each 1,000 bond is convertible into 60 shares of common stock. The bonds were issued at par in the previous year and were converted to common shares on July 1, 2020 Share structure: 1. $7 Preferred shares. The shares are cumulative and each share is convertible into eight shares of common stock. 1,000 shares were outstanding from January 1 to October 1, 2020. On October 1, 2020 all of the $7 preferred shares were converted to common shares. 2. $1.20 Preferred shares. The shares are cumulative and non-convertible. 2,500 shares were outstanding over the entire year. 3. Common shares outstanding @ beginning of year = 20,000. Issued the required number of shares for the conversion of the Series B bonds on July 1, 2020. Issued the required number of shares for the conversion of the $7 preferred shares on October 1, 2020. Stock dividend issued on November 1, 2020 Stock split declared and issued on December 1, 2020 3 for 1 4. There are outstanding written call options for the purchase of 2,000 common shares at $10 per share. Results of operations for the year: Net income before extraordinary gain $ 201,975 Gain from Discontinued Operations (net of tax) 10,000 Net Income $ 211,975 Assume that Cosmo Corporation has a year-end of December 31; that the average market price of the common shares during the year was $15 and the average tax rate was 40% 5% Required: (a) Calculate the weighted-average number of common shares outstanding for 2020. Check figure = 116,550 shares Based on your answer to part (a) calculate the required Earnings per Share figures. Present your answers to part (b) in proper financial statement format. (b) SHOW ALL CALCULATIONS!! 1. Series A convertible bonds, $200,000 outstanding, 8% interest payable annually. Each 1,000 bond is convertible into 30 shares of common stock. The bonds were issued at par on September 1, 2020. 2. Series B convertible bonds, $500,000 outstanding, 10% interest payable annually. Each 1,000 bond is convertible into 60 shares of common stock. The bonds were issued at par in the previous year and were converted to common shares on July 1, 2020 Share structure: 1. $7 Preferred shares. The shares are cumulative and each share is convertible into eight shares of common stock. 1,000 shares were outstanding from January 1 to October 1, 2020. On October 1, 2020 all of the $7 preferred shares were converted to common shares. 2. $1.20 Preferred shares. The shares are cumulative and non-convertible. 2,500 shares were outstanding over the entire year. 3. Common shares outstanding @ beginning of year = 20,000. Issued the required number of shares for the conversion of the Series B bonds on July 1, 2020. Issued the required number of shares for the conversion of the $7 preferred shares on October 1, 2020. Stock dividend issued on November 1, 2020 Stock split declared and issued on December 1, 2020 3 for 1 4. There are outstanding written call options for the purchase of 2,000 common shares at $10 per share. Results of operations for the year: Net income before extraordinary gain $ 201,975 Gain from Discontinued Operations (net of tax) 10,000 Net Income $ 211,975 Assume that Cosmo Corporation has a year-end of December 31; that the average market price of the common shares during the year was $15 and the average tax rate was 40% 5% Required: (a) Calculate the weighted-average number of common shares outstanding for 2020. Check figure = 116,550 shares Based on your answer to part (a) calculate the required Earnings per Share figures. Present your answers to part (b) in proper financial statement format. (b) SHOW ALL CALCULATIONS