Long-term debt Notes payable, 10% $1,089,000 8% convertible bonds payable 5,185,

Question

Long-term debt    Notes payable, 10% $1,089,000    8% convertible bonds payable 5,185,000    10% bonds payable 6,178,000      Total long-term debt $12,452,000 Shareholders $1,089,000 5,185,000 6,178,000 $12,452,000 Long-term debt    Notes payable, 10% $1,089,000    8% convertible bonds payable 5,185,000    10% bonds payable 6,178,000      Total long-term debt $12,452,000 Shareholders The following transactions have also occurred at Fitzgerald. Options were granted on July 1, 2011, to purchase 204,600 shares at $17 per share. Although no options were exercised during fiscal year 2012, the average price per common share during fiscal year 2012 was $25 per share. Each bond was issued at face value. The 8% convertible bonds will convert into common stock at 58 shares per $1,000 bond. The bonds are exercisable after 5 years and were issued in fiscal year 2011. The preferred stock was issued in 2011. There are no preferred dividends in arrears; however, preferred dividends were not declared in fiscal year 2012. The 1,011,800 shares of common stock were outstanding for the entire 2012 fiscal year. Net income for fiscal year 2012 was $1,542,000, and the average income tax rate is 45%. For the fiscal year ended June 30, 2012, calculate the following for Fitzgerald Pharmaceutical Industries. (Round the answers to 2 decimal places, e.g. $2.45.) Basic earnings per share. Diluted earnings per share.

Explanation / Answer

(a)

Preference dividend = 6%*$58*26900 = $93,612

Basic earnings per share = (Net inc

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