Assignment

1. Net Income for the year $350,000

2. Capital Structure

a. Cumulative 8% preferred stock, $100 par, 7,000 shares issued and outstanding all year, convertible into 7,000 shares of common stock $700,000

b. $10 par common stock, 74,000 shares issued and outstanding on January 1, 2015. $740,000

On April 1, 2015, bought 400 shares of common stock as treasury shares at $62.

On October 1, 2015, sold 120 shares of treasury stock at $60.

On December 1, 2015, sold 60 treasury shares at $68.

c. Bowie issued 8% convertible bonds at face value during $2,000,000 2014. Each $1,000 bond is convertible into 30 shares of common stock.

d. Stock options: 90,000 options to purchase 90,000 shares, exercisable at the option price of $25 per share. Average market price per share of common stock during entire year $30

e. Income tax rate 30%

Compute of earnings per common share for 2015. You MUST support your answers with computations:

(a) Basic earnings per share

(b) Diluted earnings per share