Exercise 16-23 On June 1, 2015, Indigo Company and Sweet Company merged to form Pharoah Inc. A total of 826,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis On April 1, 2017, the company issued an additional 653,000 shares of stock for cash. Al 1,479,000 shares were outstanding on December 3,201. Pharoah Inc. also issued $600,000 of 20-year, 9% convertible bonds at par on July 1, 2017, Each $1,000 bond converts to 38 shares of common at any interest date. None of the bonds have been converted to date. Pharoah Inc. is preparing its annual report for the fiscal year ending December 31, 2017. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,407,000. (The tax rate is 40%.) Determine the following for 2017. (a) The number of shares to be used for calculating: (Round answers to O decimal places, e.g. $2,500.) (1) Basic earnings per share (2) Diluted earnings per share (b) The earnings figures to be used for calculating: (Round answers to O decimal places, e.g. $2,500 (1) Basic earnings per share shares shares (2) Diluted earnings per share