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

	December 31
		2013			2012
Common shares		100,000			100,000
Convertible preferred shares (convertible into 32,000 shares of common)		12,000			12,000
10% convertible bonds (convertible into 30,000 shares of common)	$	1,000,000		$	1,000,000

Amess net income for the year ended December 31, 2013, is $500,000. The income tax rate is 40%. Ames paid dividends of $5 per share on its preferred stock during 2013.

Required:

Compute basic and diluted earnings per share for the year ended December 31, 2013.