Anchor, Inc. had income after taxes of $500,000 for the current year. An average of 125,000 shares of Anchors common stock was outstanding for the entire year, and 130,000 shares were outstanding at year-end. In addition, options were outstanding throughout the year to buy 12,000 shares of Anchor common stock at $7.50 per share. During the year, Anchors common stock had an average market price of $9 per share. The stock was selling for $10 per share at year-end. Anchor is subject to a 34 percent tax rate and amortizes its bonds using a straight-line method.

Anchor had the following convertible securities outstanding throughout the current year:

1. 6%, cumulative, convertible preferred stock. Each $10 par value share is convertible into 1.5 common shares. A total of $100,000 par value is outstanding.

2. 8 percent, 10-year, $1,000 par convertible bonds that were issued at 105. Total par value outstanding is $100,000. Each bond converts into 90 shares of common stock.

3. 13 percent, 5-year, $1,000 par convertible bonds that were issued at 97. Total par value outstanding is $30,000. Each bond converts into 30 shares of common stock.

4. 7 percent, 8-year, $1,000 par convertible bonds that were issued at 95. Total par value outstanding is $60,000. Each bond converts into 20 shares of common stock.

5. An 11%, 20-year, $1,000 par convertible bonds that were issued at face value. The total par value outstanding is $500,000. Each bond converts into 20 shares of common stock.

Required: Calculate Anchor Inc.s basic and diluted EPS for the current year.

Note: Use straight-line amortization for all the bonds. For example, if you have a 15 year, 10%, $1,000 face value bond issued at 85 and a $150 discount at issue, then $10 will be amortized each period using straight line amortization. You would have the following:

At issue:

Cash 850

Discount on B/P 150

Bonds Payable 1,000

Periodic entries:

Interest Expense 110

Discount on B/P 10

Cash 100