Collin Corporations capital structure was as follows:

December 31

Year 4Year 5

Outstanding shares of:

Stock 200,000 200,000

Convertible preferred 10,000 10,000

Debt:

Outstanding:

9% convertible bonds(issued at par) 10,000,000 10,000,000

During Year 5, Collins paid dividends of $3 per share on its preferred stock. The preferred shares are convertible into 20,000 shares of common stock, and the 9% bonds are convertible into 300,000 shares of common stock. Assume that the income tax rate is 30%.

If net income for Year 5 is $3,500,000, calculate Collins basic and diluted earnings per share for that year.