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The Vogel Corporation reported net income for Year 6 of $355,000. Vogel began the year with 200,000 shares of $5 par value common shares outstanding and 5,000 shares of $100 par value 8% preferred shares outstanding. On July 1, Vogel sold (issued) 20,000 shares of common stock for $12 per share. Vogel paid dividends to both the common and preferred shareholders in December.

1. The basic earnings per share for Year 6 is:
a. $1.43 per share
b. $1.50 per share
c. $1.58 per share
d. $1.61 per share

2. If each share of preferred stock is convertible into 8 shares of
common stock, the diluted earnings per share for Year 6 is:
a. $1.26 per share
b. $1.42 per share
c. $1.58 per share
d. $1.61 per share

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This solution is comprised of a detailed explanation to calculate basic earnings per share and diluted earnings per share for Year 6.

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The Vogel Corporation reported net income for Year 6 of $355,000. Vogel began the year with 200,000 shares of $5 par value common shares outstanding and 5,000 shares of $100 par value 8% preferred shares outstanding. On July 1, Vogel sold (issued) 20,000 shares of common stock for $12 per share. Vogel paid dividends to both the common and preferred shareholders in December.

1. The basic earnings per share for Year 6 is: ...

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