Compute diluted earnings per share for chirac enterprises

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In 2019, Chirac Enterprises issued, at par, 60 $1,000, 8% bonds, each convertible into 100 shares of common stock. Chirac had revenues of $17,500 and expenses other than interest and taxes of $8,400 for 2020. (Assume that the tax rate is 20%.) Throughout 2020, 2,000 ordinary shares (shares of common stock) were outstanding; none of the bonds was converted or redeemed.

Instructions

Question a. Compute diluted earnings per share for 2020.

Question b. Assume the same facts as , except that 20 of the 60 bonds were actually converted on July 1, 2020. Compute Basic and Diluted earnings per share for 2020.

Reference no: EM132522549

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