In 2016, Pronghorn Enterprises issued, at par, 60 $1,000, 8% bonds, each convertible into 100 shares...

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In 2016, Pronghorn Enterprises issued, at par, 60 $1,000, 8%bonds, each convertible into 100 shares of common stock. Pronghornhad revenues of $18,200 and expenses other than interest and taxesof $8,400 for 2017. (Assume that the tax rate is 40%.) Throughout2017, 2,000 shares of common stock were outstanding; none of thebonds was converted or redeemed. (a) Compute diluted earnings pershare for 2017. (Round answer to 2 decimal places, e.g. $2.55.)Earnings per share $ (b) Assume the same facts as those assumed forpart (a), except that the 60 bonds were issued on September 1, 2017(rather than in 2016), and none have been converted or redeemed.Compute diluted earnings per share for 2017. (Round answer to 2decimal places, e.g. $2.55.) Earnings per share $ (c) Assume thesame facts as assumed for part (a), except that 20 of the 60 bondswere actually converted on July 1, 2017. Compute diluted earningsper share for 2017. (Round answer to 2 decimal places, e.g. $2.55.)Earnings per share $

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Solution a Particulars Amount Revenue 18200 Expenses 8400 Bond interest 60 1000 8 60000 008 4800 Income before taxes 18200 8400 4800 5000 Taxes 5000 40 2000 Net income 5000 2000 3000 Income for diluted earnings per share 3000 4800 See Answer

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