On June 30, 2008, Lomond INC. issued 20 of $10,000, 7 % bonds at par. Each bond was convertible into 200 shares of common stock. On Jan 1, 2009, 10,000 shares of common stock were outstanding. The bondholders converted all bonds on July 1, 2009. The following amounts were reported in Lomond’s income statement for the year ended Dec 31, 2009:

Revenue                                       977,000

Operating Exp                            920,000

Interest on Bonds                         7,000

   Income before income tax    50,000

Income tax rate 30%                   15,000

Net Income                                     35,000

What is Lomond’s 2009 diluted EPS???  The answer is B- 2.85

what is Lomond’s 2009 basic EPS? The answer is C- 2.92

A.      $2.5

B.      $2.85

C.      $2.92

D.      $3.5

Can someone show me the calculation? I am a bit lost in this question….THanks

You know what would help you guys that post multiple questions on this forum(and annoyingly so)? It would be faster if you would utilize the search function and search for these questions you are posting. Don't be lazy.

I put in Lomond for the search criteria and this question has been asked a couple of other times on this forum. Try that because someone already answered the question.

Don't get the impression I'm being mean. It just seems that the nice people in this forum are being taken advantage of by people who post 5-10 questions per day without really trying to research the questions themselves. If you research a question and it is not on the forum, then it seems okay to post the question.

But just to give you a head start:

http://www.cpanet.com/cpa_forum/forum_posts.asp?TID=30917&am p;KW=Lomond

http://www.cpanet.com/cpa_forum/forum_posts.asp?TID=21022&am p;KW=Lomond