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Meyer Corp has 400, 000 shares of common stock outstanding throughout 2017. In addition, the corporation...

Meyer Corp has 400, 000 shares of common stock outstanding throughout 2017. In addition, the corporation has 50,000 shares of $20 par, 5% convertible preferred stock which it issued on June 1, 2017 The preferred stock was noncumulative and each share is convertible into 6 shares of common stock. During 2017 the corporation earned net income of $600,000. The tax rate was 20% Meyer Corp did not declare a dividend in 2019. What should be the diluted earnings per share reported in the financial statements for the year ended December 31, 2017 , round to nearest penny
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Answer #1
Earnings for Diluted Earnings per share-A $ 600,000
( Will be equal to Net Income )
Common Shares outstanding        400,000
Add: Common Stock equivalent to Convertible Preferred stock        175,000 =50000*6*7/12
Common shares for Diluted earnings per share-B        575,000
Diluted earnings per share for year ended December 31,2017 $ 1.04 =600000/575000
( A / B )
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