6.Minal Hair Products, a New York-based corporation is preparing financial statements for its financial year ended June 30, 2010. The equity capital on July 1, 2009 consisted of 1 million shares of common stock outstanding and 20,000 shares of $50 par value, 6%, convertible preferred stock. Each preferred stock was convertible into 20 shares of common stock. There were no preferred dividends in arrears. The debt capital consisted of $900,000 worth of 5%, $1,000 convertible bonds. Each bond was convertible into 50 shares of common stock. Assume a Tax Rate of 40%.

The net income for the financial year ended June 30, 2010 was $200,000.

On October 1, 2009, Minal required some funds for expansion into New Jersey and sold an additional 600,000 shares of the common stock at $20 per share. On April 1, 2010, Minal also had a 10 for 1 stock split of its common shares. These were the only stock transactions that occurred during the financial year.

Required:

For the financial year ended June 30, 2010, determine the:

(a) Basic EPS (10 points)

(b) Diluted EPS (15 points)

(Assume that the stock transactions which took place on October 1, 2009 and April 1, 2010 would still have occurred with conversion)