An excerpt from the balance sheet of Northern Corporation Limited (NCL) as at December 31, 2011 follows:

Long-term debt: 10% bond, due August 31, 2017, convertible into common shares

at $50 per share any time prior to maturity

8% mortgage bond, due January 31, 2020, convertible into common shares at $60 per share any time prior to maturity.

Share Capital: Preferred shares, annual dividend rate of $16 per share, cumulative and non-

participating, convertible into common shares at the rate of two common shares for each preferred share.

$960,000 $1,500,000

5,000 shares

Common shares: Authorized: 500,000, issued and outstanding 114,800 shares

Options:

• - In 2009, NCL signed a forward sale contract for 5,000 common shares at $40 per share to be

  executed on December 31, 2012.

• - NCL issued (written) put options in 2001 for 9,000 shares at $50 per shares. The market price at

  the time of issuance was $70 per shares. All 9,000 options are outstanding as of December 31, 2011.

  Additional information:

• - After tax earnings for the year ended December 31, 2011 were $881,000.

• - The income tax rate was 40%.

• - Average market price for the common shares during 2011 was $45 per share.

• - Dividends were paid quarterly on preferred shares and there were no dividends in arrear.

• - On October 1, 2011, 10% bonds with principal amount of $240,000 were converted into common

  shares. At the beginning of the year, principal amount of 10% bond was $1,200,000.

• - 8% mortgage bond was issued by NCL on April 1, 2011.

• - All the preferred shares outstanding at December 31, 2011, were issued on July 1, 2011.

  Required: Calculate the basic and diluted earnings per share.