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  3. long-term liabilities $4,000,000 8% convertible bo

Long-Term Liabilities $4,000,000 8% convertible bonds, each $1,000 bond convertible into 50 common shares, interest...

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Accounting

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Long-Term Liabilities $4,000,000 8% convertible bonds, each $1,000 bond convertible into 50 common shares, interest payable June 30 and December 31 Shareholders' Equity $2,000,000 4% non-cumulative series A preferred shares, $100 par value, outstanding 20,000 shares 5,000,000 5% cumulative convertible series B preferred shares, $100 par value, convertible into 2 common shares, outstanding 50,000 shares Common Stock - no par value, 400,000 shares outstanding (Note 1) 6,000,000 Retained Earnings 3,000,000 16,000,000 $20,000,000 At January 1, 2019, there were stock options outstanding enabling the option holders to acquire 100,000 common shares at $60 per share. Information for 2019: 1) Net income was $2,410,000. 2) On July 1, all the 8% convertible bonds were converted. The company had no interest obligation on these bonds in the month of July. 3) Dividends were declared and paid on the A and B preferred shares respectively. 4) The company is subject to a 40% tax rate. 5) The average share price during the year 2019 was $80. Required: 1. Compute Basic EPS. 2. Compute Diluted EPS

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