On January 1, 2014, Crocker Company issued 10-year, $3,659,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 23 shares of Crocker common stock. Crockers net income in 2014 was $280,000, and its tax rate was 45%. The company had 102,000 shares of common stock outstanding throughout 2014. None of the bonds were converted in 2014.(a) Compute diluted earnings per share for 2014. (Round answer to 2 decimal places, e.g. $2.55.)Diluted earnings per share$1.96(b) Compute diluted earnings per share for 2014, assuming the same facts as above, except that $1,020,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Crocker common stock. (Round answer to 2 decimal places, e.g. $2.55.)Diluted earnings per share$1.83part Adiluted earnings per share net incomeADD: interest savingsadjusted net incomeno of sharesdiluted eps 280000120747400747841572.15 part b outstianding sharesadd: shares assumed to be…
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