Information for Jackson Corporation for 2022: • Net Income of $875,000. • Common shares outstanding all year of 412,500. • Jackson has 150,000 options to buy common stock at $50 a share outstanding. The market price of the common stock averaged $75 during 2022. • During all of 2022, there were 5,000 shares of 10%, $100 par, cumulative, convertible preferred stock outstanding. Each share is convertible into eight shares of common stock. No dividends had been declared or paid in 2020 or 2021. • Jackson issued $5,000,000 of 5%, 15-year, convertible bonds at face value on January 1, 2022. Interest is paid semi-annually on June 30 and December 31. Each $1,000 bond is convertible into 25 shares of common stock. • Jackson issued $1,000,000 of 6%, 10-year, convertible bonds at 98 on January 1, 2019. Interest is paid annually on December 31. Jackson uses straight-line amortization of bond discount or premium. Each $1,000 bond is convertible into 50 shares of common stock. • Tax rate is 25%.
Information for Jackson Corporation for 2022:
• Net Income of $875,000.
• Common shares outstanding all year of 412,500.
• Jackson has 150,000 options to buy common stock at $50 a share outstanding. The market price of the
common stock averaged $75 during 2022.
• During all of 2022, there were 5,000 shares of 10%, $100 par, cumulative, convertible preferred stock
outstanding. Each share is convertible into eight shares of common stock. No dividends had been
declared or paid in 2020 or 2021.
• Jackson issued $5,000,000 of 5%, 15-year, convertible bonds at face value on January 1, 2022. Interest is
paid semi-annually on June 30 and December 31. Each $1,000 bond is convertible into 25 shares of
common stock.
• Jackson issued $1,000,000 of 6%, 10-year, convertible bonds at 98 on January 1, 2019. Interest is paid
annually on December 31. Jackson uses straight-line amortization of bond discount or premium. Each
$1,000 bond is convertible into 50 shares of common stock.
• Tax rate is 25%.
Required:
Compute basic and diluted earnings per share for 2022:
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