WEBSTER CORPORATION

BALANCE SHEET (PARTIAL)

AT DECEMBER 31, 2022

Long-term debt

Notes payable, 14% $ 1,000,000

8% convertible bonds payable 2,500,000

10% convertible bonds payable 2,500,000

Total long-term debt $ 6,000,000

Stockholder equity

10% cumulative, convertible, preferred stock, par value $100;

100,000 shares authorized, 25,000 shares issued and outstanding $ 2,500,000

Common stock, par value $1, 5,000,000 shares authorized,

500,000 shares issued and outstanding 500,000

Additional Paid-in capital 2,000,000

Retained earnings 9,000,000

Total stockholders equity $ 14,000,000

Notes and Assumptions

December 31, 2022

Options were granted in July 2020 to purchase 50,000 shares of common stock at $20 per share. The average market price of Websters common stock during 2022 was $30 per share. All options are still outstanding at the end of 2022.

Both the 8% and the 10% convertible bonds were issued in 2018 at face value. Each convertible bond is convertible into 40 shares of common stock. (Each bond has a face value of $1,000.)

The 10% cumulative, convertible preferred stock was issued at the beginning of 2022 at par. Each share of preferred is convertible into four shares of common stock.

The average income tax rate is 40%.

The 500,000 shares of common stock were outstanding during the entire year.

Preferred dividends were not declared in 2022.

Net income was $1,750,000 in 2022.

No bonds or preferred stock were converted during 2022.

Must Show Work.

Required: Using the information above, compute Basic EPS and Diluted EPS for Webster Corporation for 2022.

Miust Show Work- Notes and Assumptions December 31, 2019 1. Options were granted in July 2017 to purchase 50,000 shares of common stock at $20 per share. The average market price of Webster's common stock during 2019 was $30 per share. All options are still outstanding at the end of 2019. 2. Both the 8% and the 10% convertible bonds were issued in 2018 at face value. Each convertible bond is convertible into 40 shares of common stock. (Each bond has a face value of $1,000. 3. The 10% cumulative, convertible preferred stock was issued at the beginning of 2019 at par. Each share of preferred is convertible into four shares of common stock. 4. The average income tax rate is 40%. 5. The 500,000 shares of common stock were outstanding during the entire year. 6. Preferred dividends were not declared in 2019. 7. Net income was $1,750,000 in 2019. 8. No bonds or preferred stock were converted during 2019. Required: Using the information above, compute Basic EPS and Diluted EPS for Webster Corporation for 2019