**A company had a net loss of $80,000 in 2020. The company has cumulative preferred shares to which an annual dividend of $20,000 corresponds. However, in 2020 the company did NOT declare dividends. The average number of common shares outstanding for 2020 was 40,000. The company will present in its statement of income and expenses:

a. Basic loss per share $2.00 and diluted loss per share $2.50

b. Basic loss per share $2.00 and diluted loss per share $1.50

c. Basic loss per share of $2.50 and no diluted loss

d. Basic loss per share of $1.50 and no diluted loss

IS THAT CORRECT? (-80,000-20,000)/40,000 = -100,000/40,000 = -2.50 (BASIC LOSS PER SHARE)???

**Assume that the cumulative preferred shares in the previous question were issued in 2017 and are convertible into 10,000 shares of common stock. The company will present in its income statement:

a. Basic loss per share $2.50 and diluted loss per share $1.60

b. Basic loss per share $1.50 and diluted loss per share $1.60

c. Basic loss per share of $2.50 and no diluted loss

d. Basic loss per share of $1.50 and no diluted loss

DILUTED LOSS: -80,000/(40,000+10,000) = -80,000/50,000 = 1.6 , CORRECT ANSWER A?