Hillcrest Corporation's capital structure is as follows:

December 31,

2014 2013

Outstanding shares of:

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310,000.........220,000

Nonconvertible, noncumulative preferred stock . . . . . . . . . . . . . . . . . 12,000...........12,000

10% convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $800,000.........$800,000

The following additional information is available.

(a) On September 1, 2014, Hillcrest sold 90,000 additional shares of common stock.

(b) Net income for the year ended December 31, 2014, was $920,000.

(c) During 2014, Hillcrest declared and paid dividends of $6 per share on its preferred stock.

(d) The 10% bonds are convertible into 50 shares of common stock for each $1,000 bond.

(e) Unexercised options to purchase 25,000 shares of common stock at $24.00 per share were outstanding at the beginning and end of 2014. The average market price of Hillcrest's common stock for 2014 was $34 per share.

(f) Warrants to purchase 36,000 shares of common stock at $36 per share were attached to the preferred stock at the time of issuance. The warrants, which expire on December 31, 2019, were outstanding at December 31, 2014.

(g) Hillcrest's effective income tax rate was 30% for 2013 and 2014.

Instructions:

1. For the year ended December 31, 2014, compute basic EPS.

2. Compute diluted EPS for 2014.