Concept explainers
Computing Basic and Diluted EPS. Convertible Bonds, Convertible Preferred Stock, Disclosures. Daphne Company provided the following share information for the current year. Daphne reported income from continuing operations of $1,100,000 and a $450,000 loss from discontinued operations net of tax. The company is subject to a 40% tax rate.
Event and Date | Number of Shares |
1/1 Beginning balance | 150,000 |
5/1 New share issue | 345,000 |
7/1 Two-for-one stock split | |
10/1 New share issue | 300,000 |
12/1 |
(120,000) |
Daphne has $400,000 3% convertible debt outstanding as of the beginning of the year. The debt was issued at par. Each $1,000 par
Required
- a. Compute basic and diluted earnings per share for income from both continuing operations and net income Show all computations
- b. Prepare all required disclosures beginning with income from continuing operations.

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