Chapter 19, Problem 19.21E

EPS; convertible preferred stock; convertible bonds; order of entry

• LO19–7, LO19–9

Compute Stanley’s basic and diluted earnings per share for the year ended December 31, 2018. Information from the financial statements of Ames Fabricators, Inc., included the following:

Ames’s net income for the year ended December 31, 2018, is $500,000. The income tax rate is 40%. Ames paid dividends of $5 per share on its preferred stock during 2018.

Required: