Use the Following Information for Questions 117 and 118

question 137

Multiple Choice

Use the following information for questions 117 and 118.
Lerner Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $500,000 of 10% convertible bonds outstanding during 2015. The preferred stock is convertible into 40,000 shares of common stock. During 2015, Lerner paid dividends of $.45 per share on the common stock and $1.50 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2015 was $300,000 and the income tax rate was 30%.
-Diluted earnings per share for 2015 is (rounded to the nearest penny)

• A) $1.14.
• B) $1.16.
• C) $1.28.
• D) $1.33.

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Definitions:

Sound Wave

Mechanical displacement of molecules caused by changing pressure that possesses the physical properties of frequency, amplitude, and complexity. Also referred to as a compression wave.

Hearing Damage

Impairment or loss of auditory function, potentially resulting from exposure to loud noise, disease, or aging.

dB

Decibel; a unit of measurement used to express the intensity of sound or the power level of an electrical signal by comparing it with a given level on a logarithmic scale.

Compression Of Air

The process of reducing the volume and increasing the pressure of air by mechanical means.