Newton Company is preparing its annual earing per share amounts to be disclosed on

Newton Company is preparing its annual earing per share amounts to be disclosed on its 2010 income statement. It has collected the following information at the end of 2010.

1. Net income: $120,400. Included in the net income from continuing operation of $130,400 and an extraordinary loss (net of income texes) of $10,000. Corporate income tax rate, 30%.

2. Common stock outstanding of January 1, 2010: 20,000 shares.

3. Common stock issuance during 2010: July 6, 4,000 shares:  August 24, 3,000 shares.

4. Stock dividend: On October 19, 2010,the company declared a 10% stock dividend that resulted in 2,700 additional outstanding shares of common stock.

5. Commmon stock price: 2010 average market price, $30 per share; 2010 ending market price $27 per share.

6. 7% preferred stock outstanding on January 1, 2010: 1,000 shares. Terms: $100 par, nonconvertible. Current dividends have been paid. No preferred stock issued during 2010.

7. 8% convertible preferred stock outstanding on January 1, 2010; 800 shares. The stock was issued in 2009 at $130 paer share. Each $100 par preferred stock is currently convertible inot 1.7 shares of common stock. Current dividends have been paid. To date, no preferred stock has been converted.

8. Bonds payable outstanding on January 1, 2010: $100,000 face value. These bonds were issue several years ago at 97 and pay annual interest of 9.6%. The discount is being amortized in the amount of $300 per year. Each $1,000 bond is currently convertible into 22 shared of common stock. To date, no bonds have been converted.

9. Compensatory shares optikons outstanding: key executives may currently acquire 3,000 shares of common stock at $20 per share. The options were granted in 20009. To date, non have been exercised. The unrecognized compesation cost (net of tax) related to the options is $4 per share.

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