Basic Earnings Per Share Calculation: Coronado Industries 2018

To calculate the basic earnings per share (EPS) for 2018, we need to consider the net income available to common stockholders and the weighted average number of common shares outstanding.

Net income for 2018: $606,000

To calculate the weighted average number of common shares outstanding, we need to consider the common stock and the convertible preferred stock.

Common shares outstanding: 207,000 Preferred stock convertible into common shares: 39,700 (39700 shares convertible from preferred stock) Convertible preferred stock: 19,500 (19500 shares of convertible preferred stock)

The weighted average number of common shares outstanding can be calculated as follows:

207,000 (common shares) + 39,700 (converted from preferred stock) + 19,500 (convertible preferred stock) = 266,200

Basic EPS = Net income / Weighted average number of common shares outstanding

= $606,000 / 266,200 ≈ $2.28 (rounded to the nearest penny)

Therefore, the basic earnings per share for 2018 is $2.28. The correct answer is $2.28.