ACCT 304 Chapter 16 QUIZ
P16 8 Computation of Basic and Diluted EPS The information below pertains to Barkley Company
for 2013.
Net income for the year $1,200,000
8% convertible bonds issued at par ($1,000 per bond); each bond is convertible into
30 shares of common stock 2,000,000
6% convertible, cumulative preferred stock, $100 par value; each share is convertible
into 3 shares of common stock 4,000,000
Common stock, $10 par value 6,000,000
Tax rate for 2013 40%
Average market price of common stock $25 per share
There were no changes during 2013 in the number of common shares, preferred shares, or convertible
bonds outstanding. There is no treasury stock. The company also has common stock options (granted in a
prior year) to purchase 75,000 shares of common stock at $20 per share.
Instructions
(a) Compute basic earnings per share for 2013.
(b) Compute diluted earnings per share for 2013.
USA 
India