Question

Ahnberg Corporation had 560,000 shares of common stock issued and outstanding at January 1. No common shares were issued during the year, but on January 1, Ahnberg issued 180,000 shares of convertible preferred stock. The preferred shares are convertible into 360,000 shares of common stock. During the year Ahnberg paid $108,000 cash dividends on the preferred stock. Net income was $1,060,000.

What were Ahnberg's basic and diluted earnings per share for the year? (Round your answers to 2 decimal places.)

BASIC EPS:

DILUTED EPS:

Answer 1

Basic EPS
	Amount($)
Net Income	1060000
Preferance Dividend	108000
Earning available for equity	952000
No. of Equity	560000
EPS	1.7
Diluted EPS
	Amount($)
Net Income	1060000
Earning available for equity	1060000
No of shares	920000
EPS	1.152
Notes
Check for dilution
Basic EPS	1.7
Numerator	952000
Add Dividend	108000
	1060000
Denominator	560000
New shares	360000
Total after conversion	920000

In notes There is checking whether EPS will dilute after Conversion However it will surely dilute but for question we must show note.

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