
Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS. The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. For the income statement presentation of earnings per share any losses from discontinued operations should be deducted from the income from discontinued operations to arrive at the net income.
(a) To compute: To compute the Diluted EPS for 2017.
Given information: Face value: $2,000,000.
Rate: 6%.
Bond par: $1,000.
Conversion rate: 15 shares.
Net income: $300,000.
Tax rate: 40%.
Shares outstanding: 100,000.
(b) To compute: To compute diluted earnings per share for 2017.

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Chapter 16 Solutions
Intermediate Accounting
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