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
Answer: B
Business
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