Basic and Diluted EPS

The following information relates to Willowdale Limited's financial statements for the year ended 31 December 20X6:

1.On 1 January 20X6, Willowdale's capital structure consisted of the following:

450,000 common shares, issued for $5.75 million, were outstanding.

50,000 preferred shares bearing cumulative dividend rights of $5 per year.

$1 million (par value) of 8% convertible bonds ($1,000 face value), with interest payable on 30 June and 31 December of each year. Each $1,000 bond is convertible into 65 common shares, at the option of the holder, at any time before 31 December 20X11.

Outstanding options for 50,000 common shares at a price of $5 per share. The average market value of common shares during the period was $20.

2.On 30 September 20X6, Willowdale issued an additional 100,000 common shares for $1.5 million cash.

3.Willowdale reported earnings of $1.5 million for the year ended 31 December 20X6 net of tax of 25%.

Required:

Calculate the basic and diluted earnings per share figures for 20X6. (Show Work)