On December 31,2015,Heffner Company Had 100,000 Shares of Common Stock

Essay

On December 31,2015,Heffner Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%,$100 par,cumulative preferred stock outstanding.On February 28,2016,Heffner purchased 24,000 shares of common stock on the open market as treasury stock paying $45 per share.Heffner sold 6,000 of the treasury shares on September 30,2016,for $47 per share.Net income for 2016 was $540,000.The income tax rate is 40%.Also outstanding at December 31,2015,were fully vested incentive stock options giving key personnel the option to buy 50,000 common shares at $40.The market price of the common shares averaged $50 during 2016.Five thousand 6% bonds were issued at par on January 1,2016.Each $1,000 bond is convertible into 125 shares of common stock.None of the bonds had been converted by December 31,2016,and no stock options were exercised during the year.
Required:
Compute basic and diluted earnings per share (rounded to 2 decimal places)for Heffner Company for 2016.