Assume that the following data relative to Chaps, Inc. for 2015 is available:

Net Income $1,400,000

Transactions in Common Shares Change Cumulative

Jan. 1, 2012, Beginning number 500,000

Mar. 1, 2012, Purchase of treasury shares (60,000) 440,000

June 1, 2012, Stock split 2-1 440,000 880,000

Nov. 1, 2012, Issuance of shares 120,000 1,000,000

8% Cumulative Convertible Preferred Stock

Sold at par, convertible into 200,000 shares of common

(adjusted for split). $1,000,000

Stock Options

Exercisable at the option price of $25 per share. Average

market price in 2012, $30 (market price and option price

adjusted for split). 60,000 shares

Instructions

(a) Compute the basic earnings per share for 2015. (Round to the nearest penny.)

(b) Compute the diluted earnings per share for 2015. (Round to the nearest penny.)