(Solved by Humans)-Problem 16-7(Computation of Basic and Diluted EPS) Charles Austin of the controller’s office of...

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Problem 16-7(Computation of Basic and Diluted EPS) Charles Austin of the controller’s office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2013. Austin has compiled the information listed below. 1. The company is authorized to issue 8,107,200 shares of $10 par value common stock. As of December 31, 2012, 2,026,800 shares had been issued and were outstanding. 2. The per share market prices of the common stock on selected dates were as follows. Price per Share July 1, 2012 $20 January 1, 2013 21 April 1, 2013 25 July 1, 2013 11 August 1, 2013 10.5 November 1, 2013 9 December 31, 2013 10 Document Preview: Problem 16-7(Computation of Basic and Diluted EPS) Charles Austin of the controller’s office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2013. Austin has compiled the information listed below. 1. The company is authorized to issue 8,107,200 shares of $10 par value common stock. As of December 31, 2012, 2,026,800 shares had been issued and were outstanding.  2. The per share market prices of the common stock on selected dates were as follows.  Price per Share  July 1, 2012 $20  January 1, 2013 21  April 1, 2013 25  July 1, 2013 11  August 1, 2013 10.5  November 1, 2013 9  December 31, 2013 10  3. A total of 769,200 shares of an authorized 1,273,200 shares of convertible preferred stock had been issued on July 1, 2012. The stock was issued at its par value of $25, and it has a cumulative dividend of $3 per share. The stock is convertible into common stock at the rate of one share of convertible preferred for one share of common. The rate of conversion is to be automatically adjusted for stock splits and stock dividends. Dividends are paid quarterly on September 30, December 31, March 31, and June 30.  4. Thompson Corporation is subject to a 40% income tax rate.  5. The after-tax net income for the year ended December 31, 2013, was $12,380,000.  The following specific activities took place during 2013. 1. January 1—A 5% common stock dividend was issued. The dividend had been declared on December 1, 2012, to all stockholders of record on December 29, 2012.  2. April 1—A total of 465,600 shares of the $3 convertible preferred stock was converted into common stock. The company issued new common stock and retired the preferred stock. This was the only conversion of the preferred stock during 2013.  3. July 1—A 2-for-1 split of the common stock became effective on this date. The board of directors had authorized the split on June 1.  4. August 1—A total of 345,600 shares of...