Earnings Per Share with Convertible Preferred Stock Outstanding Burr Company has 500,000 shares of

$4-par value preferred stock outstanding with a 6 percent cumulative annual dividend. Each share of preferred stock can be converted into one-half share of common stock at any time. Burr has 600,000 shares of common stock outstanding and reported net income of $750,000 for the current year.

a. What amount should be reported as basic earnings per share for the year?

b. What amount should be reported as diluted earnings per share for the year?