3. Assume that the following data relate to Rosen, Inc. for the year 2018: Net income (30% tax rate) $3,800,000 Average common shares outstanding 2018 1,500,000 shares 10% cumulative convertible preferred stock: Convertible into 80,000 shares of common $1,600,000 8% convertible bonds; convertible into 75,000 shares of common $2,500,000 Stock options: Exercisable at the option price of $25 per share; average market price in 2018, $30 84,000 shares

Compute (a) basic earnings per share, and

(b) diluted earnings per share.

Please show all calculations. Be sure to show your schedule of Incremental Earnings Per Share.