Information from the financial statements of Ames Fabricators, Inc., included the following:

December 3120182017Common shares100,000100,000Convertible preferred shares

(convertible into 56,000 shares of common)26,40026,40010% convertible bonds

(convertible into 20,000 shares of common)$1,000,000$1,000,000

Ames's net income for the year ended December 31, 2018, is $740,000. 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.