Compute basic earnings per share

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Problem - The information below pertains to Barkley Company for 2015.

Net income for the year

$1,295,000

9% convertible bonds issued at par ($1,000 per bond); each bond is convertible into 40 shares of common stock

2,871,000

7% convertible, cumulative preferred stock, $100 par value; each share is convertible into 3 shares of common stock

4,029,000

Common stock, $10 par value

6,047,000

Tax rate for 2015

40%

Average market price of common stock

$25 per share

There were no changes during 2015 in the number of common shares, preferred shares, or convertible bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a prior year) to purchase 76,200 shares of common stock at $20 per share.

(a) Compute basic earnings per share for 2015.

(b) Compute the diluted earnings per sjhare for 2015.

Reference no: EM132066181

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