(Solution) - The Stockholders Equity section of Alta Company s balance sheet as -(2025 Original AI-Free Solution)

Paper Details

The Stockholders' Equity section of Alta Company's balance sheet as of December 31, 2013, contains the following:
$2 cumulative preferred stock, $25 par, convertible,
1,600,000 shares authorized, 1,400,000 shares issued,
750,000 converted to common, 650,000 shares outstanding . . . . . . . . . . . . . . . $16,250,000
Common stock, $0.25 par, 15,000,000 shares authorized,
8,800,000 shares issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200,000
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,750,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,595,000
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . $91,795,000
Included in Alta Company's liabilities are 9% convertible subordinated debentures, face value $20,000,000, issued at par in 2012. The debentures are due in 2019 and, until then, are convertible into the common stock of Alta Company at the rate of 60 shares of common stock for each $1,000 debenture. To date, none has been converted.
On April 2, 2013, Alta Company issued 1,400,000 shares of convertible preferred stock at $40 per share. Quarterly dividends to December 31, 2013, have been paid on these shares. The preferred stock is convertible into common stock at the rate of two shares of common for each share of preferred. On October 1, 2013, 150,000 shares and on November 1, 2013, 600,000 shares of the preferred stock were converted into common stock.
During July 2012, Alta Company granted options to its officers and key employees to purchase 500,000 shares of the company's common stock at a price of $20 per share. No options were exercised in 2013.
During 2013, dividend payments for the Alta common stock were as follows.
Dividend per Share
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.10
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15
Third quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10
Fourth quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15
The average market price for the company's common stock for the year was $25. Alta Company's net income for the year ended December 31, 2013, was $12,750,000. The provision for income tax was computed at a rate of 30%.
Instructions:
Compute basic and diluted EPS for the year ended December 31, 2013.