‘To download more slides, ebooks, solution manual, and test bank, visit http://downloadslide blogspot.com Part LYplormation concerning the capital structure of Dole Corporation is reproduced below: CASE 6-5! DECEMBER 31 at Es Earwings Years Years per Shar Common soc, Conertible prefered st 8% cometible bends. 90,000 shares $0,000 shares v=» 10,000 shares 10,000 shares $1,000,000 $1,000,000 During Year 6, Dole pays dividends of $1 per share on its common stock and $2.40 per share on its preferred stock. The preferred stock is convertible into 20,000 shares of common stock. The {8 convertible bonds are convertible into 30,000 shares of common stock. Net income for the ‘year ended Decemiber 31, Year 6, is $285,000. The income tax rate i 50%. Required ‘a Compute basic earnings per share forthe year ended December 3, Year 6. neck ‘Compute diluted earings per share forthe year ended December 31, Year 6 vounaon 5 $22 Part IL Tne R. Lott Company's net income for the year ended December 31, Year 6, is $10,000 During Year 6, R. Lott declares and pays $1,000 cash dividends on preferred stock and $1,750 ceash dividends on common stock. At December 31, Year 6, 12,000 shares of common stock are ‘issued and outstanding™10,000 of which were issued and outstanding throughout the entre year and 2,000 of which were ied on uly 1, Year 6, There are no other common stock transactions luring the year, and there i no potential dilution of earnings per share. Required Compute the Year 6 basic earnings per common share of R. Lott Company. Joos + > a 9). Basic ERS = (hes oo — (£2.40 n 10 880 tent) So. C8 Share J 32,90 b) Diluted EPS = Ave me Convertible (nome odyurtment ysostd Pe sy CONISTON, Ae HEE ordls dative 7 Yer Assert COM (nerest enqense for ebenrures ¥ Bo O00 &) Tote (wee) \ncrease iy neck Income £ 40-600 # Asp ERS = (Cp5.cm 4 840 8) 2H = 90 C00 + go. E80 Sharet A bs pees: F 285-000 2 £255 So cee +20 we Shares Dioeea €@S 2 Cy 206-000 4 £4000 ) | eg an Scie niente Seen EY (G0 Go + 30.c0 + 20.000 Shares) =