3. Chirping Robin Company is authorized to issue: - 1,000,000 shares of $5 par value common stock, - 50,000 shares of $100 par value, 5% cumulative and convertible preferred stock (each preferred share is convertible into 4 shares of common stock) The December 31. 2021 balance sheet included the followina stockholders' equity balances: The company had stock options outstanding to key executives. These options entitle the executives to purchase 3,000 shares of common stock at $25 per share. The options were granted on October 1, 2018, became vested on October 1, 2021, and expire on December 31, 2024. 6.5% Bonds Payable were outstanding on January 1,2022 with a $1,100,000 face value. The bonds had a carrying amount of $1,297,648 on December 31,2022 and they were trading at 96. The balance sheet on December 31,2022 also reported Interest Payable of $35,750 on these bonds. The bond agreement provides that each $1,000 bond is convertible into 20 shares of common stock. To date, no bonds have been converted. During 2022 the following transactions effecting stockholders' equity occurred: April 1 The company purchased 1,200 shares of its own common stock in the open market for $42 per share. October 10 Declared the annual dividend to the preferred shareholders to be paid on November 15th, to shareholders of record on October 31t,2022. November 1600 shares of the 5% convertible preferred stock were converted into common stock. The market value of the common stock was $42 per share and the market value of the preferred shares was $105 per share. December 5 Declared a 10% stock distribution to common shareholders when the market price of the common stock was $51.50. The shares will be distributed on January 5oh to shareholders of record on December 20 th. Other data: - Net income for 2022 was $233,000. - On December 31, 2022 the common shares were selling for $50 per share, - The average market price of the common stock during 2022 was $44, and - The company is subject to an income tax rate of 35%. Required: ( 30 points) A) Explain what the January 1st "Paid-In Capital from Stock Options" account represents. NOTE: Be sure to discuss the effect of relevant details from the stock option award. B) Determine the basic earnings per share for 2022 . C) Would the potential common shares from the bonds payable be included in the computation of diluted earnings per share for 2022 ? Explain