Terrell Foods Reported $870,000 in Net Income and Its Weighted

question 13

Multiple Choice

Terrell Foods reported $870,000 in net income and its weighted average shares outstanding for the year is 200,000 shares. In prior years it sold $1,500,000 of 8% long-term convertible bonds at par which are still outstanding. The bonds are convertible into 10,000 shares of common stock. The tax rate for all years is 40%. If Terrell has no other potentially dilutive securities and no preferred stock, and no conversions occur during the year, what are basic and diluted EPS? (Round your final answers to the nearest cent.)

• A) basic EPS $4.35; diluted EPS $4.49
• B) basic EPS $4.14; diluted EPS $4.49
• C) basic EPS $4.35; diluted EPS $4.71
• D) basic EPS $4.14; diluted EPS $4.71

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Definitions:

State-dependent Memory

The phenomenon whereby information learned in a particular state of mind is more easily recalled when in the same state.

Episodic Memory

The subtype of long-term memory that involves the recollection of specific events, situations, and experiences.

Body Condition

The physical state of a person's or animal's body, often in terms of muscle and fat levels.

Encoding Specificity

The principle that recall is more effective when the context at the time of encoding is similar to the context at the time of retrieval.