Homework answers / question archive / On January 1, 2020, Pina Company issued 10-year, $1,810,000 face value, 6% bonds, at par

On January 1, 2020, Pina Company issued 10-year, $1,810,000 face value, 6% bonds, at par

Accounting

Share With

On January 1, 2020, Pina Company issued 10-year, $1,810,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Pina common stock. Pina’s net income in 2020 was $470,450, and its tax rate was 20%. The company had 97,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $

(b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $970,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Pina common stock. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $