Exercise 19-21 EPS; convertible preferred stock; convertible bonds; order of entry [LO19 7, 19-9 Information from the financial statements of Ames Fabricators, Inc., included the following: December 31 2018 2017 Common shares 100,000 100,000 Convertible preferred shares (convertible into 72,000 shares of common) 10 convertible bonds (convertible into 20,000 shares of common) 36,000 36,000 $1,000,000 $1,000,000 Ames's net income for the year ended December 31, 2018, is $900,000. The income tax rate is 40%. Ames paid dividends of $5 per share on its preferred stock during 2018 Required: Compute basic and diluted earnings per share for the year ended December 31, 2018. (Enter your answers in thousands.) Answer is complete but not entirely correct. Earnings per Share Numerator Denominator Basic EPS $ 720,000 100,000 7.20 Diluted EPS $ 780,000 3.68 212,000