Houston county energy (houston) is a diversified energy company with a portfolio of natural gas and electric businesses. houston supplies, delivers, and processes energy for customers in the united states, canada, and mexico.

as a public company, houston's stock is traded on the new york stock exchange. they rely on the reputable accounting firm, williams & johnston cpas (w& j), for all their accounting work and ad hoc consultations.

houston has a december 31st fiscal year end. it is now january 16, year 3 and you are a senior staff accountant with w& j.

houston has asked w& j to perform some earnings per share calculations for year 2. use the following information to perform the calculations.

8% convertible, cumulative, preferred stock outstanding at the beginning of year 2, $100 par value, issued in year 1:

(each share is convertible into ten common shares at the option of the shareholder. no dividends were declared in year 2.)

$2,000,000
5% convertible bonds outstanding at the beginning of year 2, issued at par in year 1, convertible into 100,000 shares of common stock at the option of the bondholder $1,000,000
common stock outstanding at the beginning of year 2, $10 par value, issued in prior years $3,000,000
additional paid-in capital at the beginning of year 2 $900,000
retained earnings at the end of year 2 $750,000
net income for year 2 $4,000,000
additional information:

april 1, year 2 - issued 10,000 shares of common stock for $110,000
june 1, year 2 - declared a 40% stock dividend
october 1, year 2 - declared a 2 for 1 stock split
the tax rate for year 2 is 40%.
you may use the calculator and/or spreadsheet functions to make the necessary calculations. record your final answers in the spaces provided below. round to two decimal places if applicable.