Horticulture Ltd began 2014 with the following capital structure:

Common shares:

Authorized: Unlimited number

Issued and outstanding: 100,000 shares$250,000

Convertible preferred shares: Series A

Cumulative, $5 dividend rate, each preferred share is convertible

into 3 common shares. Dividends are paid quarterly ($1.25 per quarter).

Issued and outstanding: 20,000 share $100,000

Convertible Bond: Series L

$500,000 face value. Stated interest rate 4%. Due December 31st, 2016.

Convertible into common shares any time prior to the conversion.

Each 1,000 bond is convertible into 5 common shares.$480,000

Series A Options:

There were 30,000 options outstanding, which allowed executives

to purchase 30,000 common shares at $30 per share up to 2018.

During 2014, the following transactions occurred:

February 2 - Retired 10,000 common shares

April 15 - 5,000 of the convertible preferred Series A shares were converted into 15,000 common shares.

May 3 - Sold an additional 20,000 common shares.

June 15 - Issued another 10,000 options to senior executives which was entitled Series B Option. The option was exercisable until 2019 at an exercise price of $40 per share.

July 3 - Issued a new class of convertible cumulative preferred shares entitled Series B. 50,000 shares were issued. The dividend rate attached to the issue was $4 per share. Each preferred share is convertible into 3 common shares. Dividends are paid quarterly (March 31, June 30, Sept. 30 and Dec. 30)

November 4 - Issued a new $600,000 face value bond (Called Series N) that is convertible into 16 common shares for each $1,000 bond. The bond interest paid during 2014 was $5,000 and the premium amortization recorded was $1,000. No bonds were converted in 2014.

December 15 - Sold 10,000 common shares.

Additional information for 2014:

Income from continuing operations - $600,000

Tax rate for 2014 - 20%

Average selling price of the common shares during the entire year - $35

Interest expense recorded on the Series L Convertible bond before tax - $18,000

Calculate Basic EPS and Diluted EPS for 2014. Ensure you identify what securities are dilutive and anti-dilutive as well as the individual effects relating to each potentially diluted security.