What is the diluted earnings per share for colors company

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Problem 1: Colors Company has 200,000 shares of ordinary share on January 1, 2012. On August 31, 2012, 9% convertible P2,000,000 face value (equal to its liability component) bonds were issued. Each 1,000 bonds are convertible into 45 ordinary shares. Net income after income tax of P1,684,200 was reported by Colors for the entire year. What is the diluted earnings per share? Income tax rate is 32%

a. 7.32       c. 7.85
b. 7.50       d. 8.42

Reference no: EM132745398

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