Austin Products Reported $350,000 Net Income for the Year with 100,000

question 49

Multiple Choice

Austin Products reported $350,000 net income for the year with 100,000 common shares outstanding all year.Austin also had 50,000 shares of $100,8% convertible preferred shares outstanding all year.Each preferred share is convertible into 10 shares of common stock.Determine the numerator for both basic and diluted EPS.

• A)basic EPS $350,000 - (50,000 × $100 × 8%); diluted EPS $350,000 - (50,000 × $100 × 8%)
• B)basic EPS $350,000 - (50,000 × $100 × 8%); diluted EPS $350,000
• C)basic EPS $350,000 - (50,000 × $100 × 8%); diluted EPS $350,000 + (50,000 × $100 × 8%)
• D)basic EPS $350,000; diluted EPS $350,000