For your last assignment from the audit senior, you are to review the income statement. The audit senior noticed that the EPS information was left out of the financial statements. He wants you to calculate both the basic and diluted EPS (for dilutive EPS, use the convertible securities from the W5: Assignment 3). Income Statement of Hogg Enterprises for the Year Ended 2008 Net revenues $20,000,000 Cost of goods sold $11,200,000 Gross profit $8,800,000 Selling and administrative expenses $4,320,000 Income from operations $4,480,000 Other revenues and gains Interest revenues $500,000 Other expenses and losses Loss on disposal of old equipment $50,000 $450,000 Income from continuing operations before income tax $4,930,000 Income tax (at the rate of 40%) $1,972,000 Income from continuing operations $2,958,000 Discontinued operations Income from operations of Bacon division, net of Applicable income tax of $36,000 $54,000 Loss on disposal of Bacon division, less Applicable income tax of $70,000 $1,05,000 $51,000 Income before extraordinary item $2,907,000 Extraordinary item Loss from tornado, less Applicable income tax of $148,000 $222,000 Net Income $2,685,000 Compute the companys basic and diluted EPS. Update the log of issues to include this weeks topics. *** W5: Assignment 3 Financial Statement Listings 5 percent cumulative preferred stock $100 par value $10,000,000 Additional paid-in capital Preferred stock $5,000,000 Convertible bond payable (7 percent, 10-year bonds issued 7/1/06) $15,000,000 Discount on convertible bonds payable $1,125,000 Security Conversion Rate 100,000 shares of $100 par value preferred stock 3 shares of CS for each share $1,000 convertible bond 20 shares of CS for each bond