Prince Corp

question 21

Essay

Prince Corp.has the following balance sheet information at December 31,2014.

The convertible bonds were issued at par on April 1,2014 and are convertible into Prince's common stock at a ratio of 25 shares of stock to 1 bond.Prince did not have any treasury stock at December 31,2013 and purchased the 9,000 shares evenly throughout 2014.The average price of the common stock for the year was $40,and the year end price was $45.
Prince Corp.also has 60,000 outstanding and exercisable qualified employee stock options.Employees obtain one share of stock for each option exercised.The exercise price for each option is $21 per share.
Prince's net income for the year ended 2014 was $292,500.Its tax rate for the year was 35%.
Required:
1.Compute basic EPS for the year ended December 31,2014.Show all computations.
2.Compute diluted EPS for the year ended December 31,2014.Show all computations.

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Definitions:

Anterior Cingulate Cortex

A part of the brain involved in emotional regulation, decision-making, and processing social information.

Cingulate Gyrus

A part of the brain situated in the medial aspect of the cerebral cortex, involved in processing emotions and behavior regulation.

Brain

The organ in the head of living beings responsible for central nervous system functions, including thought, memory, emotion, touch, motor skills, vision, breathing, temperature control, and much more.

Social Connections

The relationships and bonds between individuals that provide support, facilitate communication, and contribute to social cohesion.