Patsie Pops, Ltd. began the current year with 310,000 common shares outstanding and issued an additional 150,000 shares on August 1. The firm has $9,000,000, 3% convertible bonds outstanding at the beginning of the year (i.e., $270,000 coupon interest per year), which are convertible into 180,000 shares of common stock. The firm issued the bonds at their par value and converted them on March 1. Patsie Pops also has $900,000 par value, 2% convertible, noncumulative preferred stock outstanding. The preferred shares can convert into 50,000 shares of common stock and were outstanding for a full year. The firm declared dividends for the current year. There were no actual conversions of the preferred stock during the year. Patsie is subject to a 40% effective tax rate, and net income is $3,000,000. Assume that all convertible securities are dilutive. Requirement a. Based on this information, compute basic and diluted earnings per share for the current year. Begin with the basic earnings per share for net income for the current year. Select the correct letters for the numerator and the denominator on the formula line using the choices listed in the popup below. Enter the numerator and denominator amounts into the formula and calculate the basic EPS. (Round the EPS to the nearest cent, $X.XX.) (Click the icon to view the numerator and denominator choices.) M = Basic EPS Net income Calculate the diluted earnings per share for net income for the current year. Select the correct letters for the numerator and the denominator on the formula line using the choices listed in the popup below. Enter the numerator and denominator amounts into the formula and calculate the diluted EPS. (Round the diluted EPS to the nearest cent, $X.XX.) (Click the icon to view the numerator and denominator choices.) F N Diluted EPS Net income Requirement b. Prepare the earnings per share disclosure on the income statement beginning with net income. (Complete all answer boxes. Enter all EPS amounts to the nearest cent, $X.XX.) Patsie Pops Company EPS Disclosure Income Statement (Partial) For the Current Year Earnings per common share: III A Net income B Net income + Preferred dividend requirements C Net income - Preferred dividend requirements D Net income + Preferred dividend requirements + Interest expense, net of tax E Net income + Preferred dividend requirements + Interest expense, net of tax - Preferred dividends avoided on convertible preferred stock F Net income - Preferred dividend requirements + Interest expense, net of tax G Net income - Preferred dividend requirements + Interest expense, net of tax + Preferred dividends avoided on convertible preferred stock H Net income - Preferred dividend requirements - Interest expense, net of tax - Preferred dividends avoided on convertible preferred stock | Number of common shares outstanding, end of year J Number of common shares outstanding, end of year + Common shares on debt conversion + Common shares on preferred stock conversion K Number of common shares outstanding, end of year + Common shares on debt conversion - Common shares on preferred stock conversion L Number of common shares outstanding, end of year - Common shares on debt conversion - Common shares on preferred stock conversion M Weighted average common shares outstanding N Weighted average common shares outstanding + Weighted common shares on debt conversion + Weighted common shares on preferred stock conversion o Weighted average common shares outstanding + Weighted common shares on debt conversion - Weighted common shares on preferred stock conversion P Weighted average common shares outstanding - Weighted common shares on debt conversion - Weighted common shares on preferred stock conversion