During 2021, Dahlia Limited had two classes of shares outstanding.

Convertible preferred shares, 1,000 shares issued and outstanding at the beginning of the

year; quarterly dividend rate of $100 per share, cumulative; each share is convertible into

50 shares of common.

Common shares, 100,000 shares issued and outstanding at the beginning of the year.

Also assume the following:

Net income for the year is $2,000,000; there are no discontinued operations.

400 shares of convertible preferred shares were converted into 20,000 common shares on

April 1, 2021; dividends for the first quarter of the year were paid on March 30, 2021.

Required:

1) Determine the weighted-average number of common shares outstanding during 2021. (3 marks)

2) Determine the basic EPS for 2021. Round to the nearest cent. (3 marks)