The company had 100,000 shares of common stock outstanding throughout the year. In addition, as of January

Question:

The company had 100,000 shares of outstanding throughout the year. In addition, as of January 1, the company had issued 10,000 convertible preferred shares (cumulative, 5%, $100 par). The company has no other potentially dilutive securities. Net income for the year was $400,000. Compute diluted earnings per share, assuming that
(1) Each preferred share was convertible into four shares of Each preferred share was convertible into one share of common stock.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...