At December 31, 20XX, The Jason Company had 20,000 shares of cumulative, participating preferred stock authorized and 100,000 shares issued. The preferred stock, which was issued on July 1, 20XX, paid an annual dividend at 12% and had a par value of $1.00 per share and a year-end market value of $3.00 per share. Assuming that Jason met certain earnings targets over the next three years, the preferred stock could be converted at that time, at the option of the shareholder, into 12,000 shares of common stock. As of December 31, the company's board of directors had not yet declared the preferred stock dividend. At January 1, 20XX, the company had 10,000 shares of common stock outstanding. The stated value of this stock was $4.00 per share, and the market value in January was $5.00 per share. On July 1, 20XX, when the market value was $7.00 per share, Jason issued another 6,000 shares of common stock in exchange for cash and several pieces of production equipment. The company's net earnings for 20XX were $136,000. What earnings per share were reported for the year?

Would preferred stock be 50,000 shares becuase was issued july 1, 20XX (100,000 shares x 6/12= 50,000 shares) or would it be 100,000 shares instead?

Also calculate basic and diluted earnings per share