Reference no: EM133053820

Question - On December 31, 20x0, Broncos Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $100 par, cumulative, non-convertible preferred stock outstanding. On February 28, 20x1, Broncos purchased 24,000 shares of common stock on the open market as treasury stock paying $45 per share. Broncos sold 6,000 of the treasury shares on September 30, 20x1, for $47 per share. Net income for 20x1 was $540,000. The income tax rate is 40%. Also, five thousand 6% bonds were issued at par ($5,000,000) on January 1, 20x1. Each $1,000 bond is convertible into 125 shares of common stock. None of the bonds had been converted by December 31, 20x1. Compute basic and diluted earnings per share for Broncos Company for 20x1.