Charles Austin of the controllers office of the Ditto Corporation was given the assignment of determining the basic and diluted EPS values for the year ending Dec. 31, 2011. Austin has compiled the information listed below:

The company is authorized to issue 8,000,000 shares of $10 par value common stock. As of Dec. 31, 2010, 2,000,000 shares had been issued and were outstanding.

The per share market prices of the common stock on selected dates were as follows:

Price per share

July 1, 2010 $ 20.00

Jan 1, 2011 21.00

April 1, 2011 25.00

July 1, 2011 11.00

August 1, 2011 10.50

November 1, 2011 9.00

Dec. 31, 2011 10.00

A total of 700,000 shares of an authorized 1,200,000 shares of convertible preferred stock had been issued on July 1, 2010. The stock was issued at its par value of $25, and has a cumulative dividend of $3 per share. The stock is convertible into common stock at a rate of one share of convertible preferred for one share of common. The rate of conversion is to be automatically adjusted for stock splits and stock dividends. Dividends are paid quarterly on September 30, December 31, March 31, and June 30.

Ditto Corporation is subject to a 40% income tax rate.

The after-tax net income for the year ended Dec. 31, 2011 was $11,550,000.

The following specific activities took place during 2011:

January 1 A 5% common stock dividend was issued. The dividend had been declared on Dec. 31, 2010 to all stockholders of record on Dec. 29, 2010.

April 1 A total of 400,000 shares of the $3 convertible preferred stock was converted into common stock. The company issued new common stock and retired the preferred stock. This was the only conversion of the preferred stock during 2011.

July 1 A 2-for-1 split of the common stock became effective as of this date. The BOD had authorized the split on June 1.

August 1 A total of 300,000 shares of common stock were issued to acquire a factory building.

November 1 A total of 24,000 shares of common stock were purchased in the open market at $9 per share. These shares were held as treasury stock and were still held in the treasury as of Dec. 31, 2011.

Common stock cash dividends Cash dividends were declared and paid as follows:

April 15 - $0.30 per share

October 15 - $0.20 share

Preferred stock cash dividends Cash dividends to preferred stockholders were

declared and paid as scheduled.

Determine the number of shares used to compute the basic earnings per share for the year ended Dec. 31, 2011.

Determine the number of shares used to compute diluted earnings per share for the year ended Dec. 31, 2011.

Compute the adjusted net income to be used as the numerator in the basic earnings per share calculation for the year ended Dec. 31, 2011.

Determine the Basic Earnings per share and the diluted Earnings per share for the year ended Dec. 31, 2011.